Attending a foreclosure auction can be quite the adrenaline rush. However, if you do not want that excited feeling to quickly turn to disappointment, you are going to need to know a few secrets that will actually help you win.
1. Get Familiar with the Basics – It is always a good idea to attend a couple auctions first, just to see one in action, even if you read everything that you can find according to your state. You will learn a lot more by watching one actually taking place. It is important that you understand that these homes are sold “as-is,” so if there are expensive repairs that need to be done, you will be responsible for them.
2. Make Sure it is the Property You Want – Unlike a new pair of shoes that you can just go return if you decide they don’t complement your outfit, there are no refunds on a foreclosure. Make sure you gather as much information about the property as possible. A title search will reveal if there are liens against it, and a chat with a realtor will give you an idea of what homes in that area are worth.
3. Don’t Get Overwhelmed – You may plan to bid only up to a certain amount, but then get caught up in the excitement. It’s hard to resist a little friendly competition. Spend time determining what your cut off amount is, and then commit to not going over it. You will need to put down a deposit, so be sure to bring cash or a cashier’s check.
4. Know the Rules – After you pay your deposit, you will have a specified amount of time to secure financing and pay the balance of your bid. If it is not paid by the deadline, you will lose your deposit.
5. Secure Financing – It’s a good idea to talk a lender prior to attending an auction. You may only have a couple weeks to pay the balance, so if there’s a chance you could hit some red tape with financing, resolve it ahead of time. This means you need to know what’s on your credit report, as well.
Foreclosures give you the opportunity to get a home you might not otherwise ever be able to afford. Make sure you are comfortable with the process before you actually bid. If you win don’t delay on securing your financing to make the purchase official.