Buying Foreclosure Homes At Auction

Written by Linda Alexander
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Are you thinking of buying foreclosure homes at auction? If so, you have a lot of potential for profit. But before you believe the hype of those late-night infomercials, understand the facts.

Buying Foreclosure Homes at Auction

The minimum bid at auctions includes the balance on the loan, accrued interest, and any costs associated with the foreclosure process, including attorney's fees. When buying foreclosure homes at auction, you are buying the property "as is," which may mean it needs repairs or still has people living in it.

What is owed to the bank is almost always more than the home's actual value. Because of this, many foreclosures do not get sold at auction. When that happens, the lender takes ownership. If you are still interested, you are no longer buying foreclosure homes at auction. At this point, you must attempt to buy from the bank.

But remember, not all foreclosures are bargains. Find out in advance what the house's market value is, what renovations will cost, including time, and how much money the bank has spent on the property so far. If you need financing, you may or may not have to go to a different lender to obtain it.

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