There is a set of terminology unique to home foreclosure auctions, they correspond to some of the more important features of this manner of purchasing property.
There are two main types of foreclosures, the absolute and the reserve auction.
Absolute auctions pertain to auctions where the houses go to the highest bidder at whatever value, while the reserve auction is where the seller has a minimum amount at which they will accept a bid.
Unless otherwise set, the reserve auction is the default structure for this kind of home sale.
Note that the seller will only sell the home if the reserve price is met.
Sometimes auctions have a minimum bid, which means that the seller is willing to sell the property once it reaches this amount but it could still go higher.
Research and Inspection Anyone planning to participate must do a title search for the properties they wish to bid on at foreclosure auctions.
This will reveal any and all liens attached to the property as well as unpaid taxes, which will all transfer to the winner of the auction.
An actual inspection of the property is imperative as these homes are put up for sale in their present condition and the auction winner will also shoulder the cost of all the needed repairs.
Prospective buyers will likely not be able to enter the premises so its best to make a cursory search of the property from outside and talk to the neighborhood to get an idea of what is inside the house.
Placing a Bid and Payment Most auctions will have a registration process conducted by the law office in charge of foreclosure auctions.
There could be a screening process that determines whether a bidder is qualified to participate.
All qualified bidders will get a kit that may include a catalog and some bidding cards.
Bidding cards are used to signify a buyer's bid, once raised the auctioneer calls out the new bid value and scouts the room for other bidding cards that raises the bid amount.
The actual proceedings go smoothly, which is very different from how it is depicted in films where auctions look chaotic and nerve-wracking.
Once a property is won, the winning bidder may be required to pay 10 percent of the total cost up front.
The rest will be paid over a short period of time so the buyer has to have their finances in order and be good for the entire purchase price of the property.
Once the purchase agreement is signed, the contract becomes binding, the seller has to sell the property to you and the winning bidder is beholden to purchase the property.
So all those horror stories about what goes on at foreclosure auctions are not really true.
These proceedings are pretty straightforward and clean if you just know how to go about it.
It is always good to first test the waters by participating in some auction only as an observer to get a better understanding of how the whole process works until you're confident enough for your first actual auction to participate in.
There are two main types of foreclosures, the absolute and the reserve auction.
Absolute auctions pertain to auctions where the houses go to the highest bidder at whatever value, while the reserve auction is where the seller has a minimum amount at which they will accept a bid.
Unless otherwise set, the reserve auction is the default structure for this kind of home sale.
Note that the seller will only sell the home if the reserve price is met.
Sometimes auctions have a minimum bid, which means that the seller is willing to sell the property once it reaches this amount but it could still go higher.
Research and Inspection Anyone planning to participate must do a title search for the properties they wish to bid on at foreclosure auctions.
This will reveal any and all liens attached to the property as well as unpaid taxes, which will all transfer to the winner of the auction.
An actual inspection of the property is imperative as these homes are put up for sale in their present condition and the auction winner will also shoulder the cost of all the needed repairs.
Prospective buyers will likely not be able to enter the premises so its best to make a cursory search of the property from outside and talk to the neighborhood to get an idea of what is inside the house.
Placing a Bid and Payment Most auctions will have a registration process conducted by the law office in charge of foreclosure auctions.
There could be a screening process that determines whether a bidder is qualified to participate.
All qualified bidders will get a kit that may include a catalog and some bidding cards.
Bidding cards are used to signify a buyer's bid, once raised the auctioneer calls out the new bid value and scouts the room for other bidding cards that raises the bid amount.
The actual proceedings go smoothly, which is very different from how it is depicted in films where auctions look chaotic and nerve-wracking.
Once a property is won, the winning bidder may be required to pay 10 percent of the total cost up front.
The rest will be paid over a short period of time so the buyer has to have their finances in order and be good for the entire purchase price of the property.
Once the purchase agreement is signed, the contract becomes binding, the seller has to sell the property to you and the winning bidder is beholden to purchase the property.
So all those horror stories about what goes on at foreclosure auctions are not really true.
These proceedings are pretty straightforward and clean if you just know how to go about it.
It is always good to first test the waters by participating in some auction only as an observer to get a better understanding of how the whole process works until you're confident enough for your first actual auction to participate in.