Buying Foreclosures at Auction: 5 Tips for Success

Foreclosure auctions are like car accidents, no one wants to be the victim, but there are many interested in seeing how it happens. For some people auctions are a waste of time and for others the only way they know to buy a property. Put these 5 tips to work for you (especially #5) and you’ll have low risk and high returns.
 
1. Find out who is foreclosing: First determine if it is the first mortgage or the second mortgage holder who is foreclosing. If it is the first mortgage, you will be buying subject to state, federal and municipal taxes, such as taxes, water and sewer. If the second lien holder is foreclosing, then you will be subject to the settlement amount of the first mortgage and state, federal, and municipal liens.
 
2. Do a title search: To uncover any title defect that may adversely affect the value or marketability of the property. Normally, you do this after you have a property under contract, but at auction you have no way to back out without losing your deposit. In most cases, searching for the current owner is acceptable.
 
3. Be a spectator: Attend at least two auctions as a spectator before becoming a registered bidder at an auction. You must visit two other auctions that you do not intend to bid on to witness the process.
 
4. Contact the auctioneer: Call the auctioneer the morning of the auction. This will save you time as many auctions are canceled or postponed.
 
5. Network: Networking with investors at the auction is one of the best techniques for finding motivated buyers. You can find buyers in ways such as calling signs or advertisements “we buy houses,” but the investor who buys at auction in most cases focuses on buying at auction and does so simply because it is the fruit of the auction. hand and that’s the only way they know how. It is very easy to identify an opportunity as long as you can read the newspaper and follow a map.
 
I am surprised that no other investor uses this strategy. How do I know this? Because I’m the only one at an auction going from car to car to introduce myself and exchange business cards and find out what kind of properties they like to buy. Most investors keep to themselves in the auction because they see others as competition. I don’t consider them competition, I consider them cash buyers and they may want to buy a property that I’m not interested in or they may pay more for the property. Either way you will make more money.