In this comprehensive guide, we’ll walk you through the entire process of bidding and winning bank owned homes for sale. Whether you’re a seasoned real estate investor or a first-time buyer, we’re here to help you confidently navigate each step- from placing your initial bid to successfully closing the deal. You’ll learn critical strategies to help you avoid common pitfalls, maximize your chances, and feel empowered throughout the entire process.
For anyone looking to purchase a Bank-Owned or Real Estate-Owned (REO) property, understanding the process is key to success. While the auction process may have its complexities, with the right knowledge and preparation, you can navigate it smoothly—even as a first-time buyer. Let’s walk through the journey an REO property takes, from delinquency to auction, and show you how to make a successful purchase on Auction.com.
Want to dive deeper into the process? We’ve got you covered! Watch our “Bid with Confidence” webinar, where we guide you through the process and you can also watch the final moments of a real bidding demonstration to see how it all works in action!
Click Here to Watch the Webinar
Before we dive into bidding strategies, let’s quickly walk through the lifecycle of an REO property so you know what to expect.
The Lifecycle of an REO Property
1) Loan Delinquency: When a property owner misses mortgage payments, the lender declares them delinquent.
2) Foreclosure Procedure: The lender starts the foreclosure process against the borrower who is past due.
3) Reversion to Servicer/Bank: The property reverts to the servicer or bank in the event that it is not sold at the foreclosure auction.
4) REO Properties Designation: The property has been assigned an REO classification, allowing the servicer to post it for online sale on platforms like Auction.com.
5) First Look Program: Some properties enter a 30-day First Look Program, where only owner-occupants or non-profits can make offers to help strengthen community development. Be sure to keep an eye on the property’s status and be ready to bid once it exits the First Look Program.
How to Purchase an REO Property
To purchase an REO property on Auction.com, you need to first register, choose preferences, and get personalized recommendations. While perusing the Property Details Page, search, sort, and save properties of interest.
Next, you need to create Purchase Profiles and be aware that some auctions require a Bid Deposit to unlock your bidding paddle. Auctions take place every week, so you’ll always have new opportunities to participate. Once you win an auction, the purchase contract is drawn up, and you’re one step closer to closing the deal!
At Auction.com, you can start your research and due diligence on the Property Details Page.
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How to Use the Property Details Page?
• Start your investigation on the details page of the REO auction property.
• The Opening Bid, bid increments, auction date, and access property details.
•To receive updates on auctions and customized recommendations, use the Save function.
• Examine market analysis indicators to determine the property’s investment possibilities, such as local comparable properties and rental estimations.
• Scroll to the bottom of the page for essential details on fees, terms of sale, and other important transaction information.
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Bid Preparation
Before you place a bid on Auction.com, you must satisfy a few preliminary conditions like registering, creating a purchase profile and so on.
1)Registration Steps:
On the Property Details Page, click “Register for Auction” and follow the prompts to verify your identity.
2)Create Your Purchase Profile:
Take a moment to fill out your Purchase Profile with all your details, including how you intend to own the property. Setting this up in advance saves time and streamlines the bidding process. Make sure you have all your documents ready, including proof of funds and an Earnest Money Deposit (EMD).
Bidding on Auction.com
In the Bid Box, you’ll see real-time updates on:
- The current bid and bid increment.
- Time remaining in the auction.
- Whether the reserve price has been met.
You can place a Proxy Bid before the auction starts, allowing our platform to automatically increase your bid as needed, so you don’t have to monitor the auction constantly. This is a great way to bid with confidence, knowing you’ve got a competitive edge!
Winning the Auction
- When you win the auction, a Congratulatory Winning Bid Box will show up once you win.
- Complete your Contract Information Form (CIF) within three hours to generate your purchase contract.
- Submit your Earnest Money Deposit (EMD) within one or two days, depending on the seller’s requirements.
To learn more about the post-auction closing process visit our Winning Bidder Resource Center for more details or reach out to our Buyer Success Team at any time.
Find REO Properties on Auction.com
