Qualities of Foreclosure House Auctions for Sale

If you have misgivings about foreclosure house auctions for sale, it could be that you do not know all there is to know about this type of property. While there may be a handful of horror stories related to foreclosure auctions, these are more of the exception than the rule. There are thousands of homes in tip top shape that are being offered at these auctions. All you need to do is put in some serious research before bidding on one.

Diamonds in the Rough

While it may be true that foreclosure house auctions for sale are usually pre-owned homes that will need some level of repair and restoration, the value of these homes are usually adjusted in order to reflect this quality. This is the reason why the starting bids for these homes are way lower than their market value. But one has to be financially prepared to shell out the entire amount if they win the auction since this would be a cash sale. You will not be required though, to settle everything on the same day just on the same week.

There is a fee that is paid upfront at registration. It serves as earnest money for bidders in the auction. It is typically pegged at 10 percent of the opening bid and this is the only form of payment a bidder will make on the actual day of the auction.

Coming prepared for the auction requires that one has researched the property, especially its title. It would also be a good idea to learn about the foreclosure laws in the state where the property is located. There are some states that protect the rights of homeowners by giving them up to six months to redeem their foreclosed home. Check if this possibility exists in the property you are eyeing. The title must be free of any loans or hidden taxes and other encumbrances as this would become your responsibility if you win the auction.

But generally, foreclosure house auctions for sale are sound investment options. If one has the cash, but not enough for a brand new home, then these properties are ideal as you have instant equity and you would not have to worry about interest rates or mortgage payments.