Foreclosure property investment using Auction.com offers the opportunity for fast returns where you benefit from complete control and visibility. This guide will help you expertly navigate foreclosure auctions and bid to win with confidence on Auction.com.
Investing in traditional real estate can often be overly demanding, complicated and time-consuming. In this article, we provide you with alternative strategies for optimal outcomes at foreclosure auctions.
Read on so that you can confidently leverage Auction.com to bid and win. Irrespective of your level of experience with foreclosures, by the end you will have learned the right way to leverage the Auction.com platform and win foreclosure properties at auction. You can also watch our prerecorded webinar by clicking the link below.
Click Here to Watch the Webinar
Let’s begin by understanding the foreclosure process.
The Foreclosure Auction Process
- Default Status: When the homeowner misses mortgage payments, the property enters default status.
- Foreclosure Initiation: The lender eventually initiates the foreclosure process and places the property up for auction.
- Winning Bid: If a buyer’s bid amount is the highest, they win the property, the deed is executed and transferred to the new owner.
- Reversion to Servicer: In case of no winning bid, the property reverts to the lender to become bank-owned, also known as Real Estate-Owned (REO).
You can learn more about the REO auction process through this prerecorded webinar.
How Bidding on Auction.com Works
Here are the steps that you would take before bidding on foreclosure property on Auction.com:
- Sign up for a free account on the Auction.com website or mobile app.
- Search for properties, filter and sort to customize your search as per your needs.
- Save properties to your favorites to receive important updates and relevant recommendations.
- Conduct due diligence on a property that piques your interest using its Property Details Page.
- Prepare funds that you may require to bid on the property.
- Register to bid in person at the live auction or online on our app or website.
- The winning bidder must make full payment for the property before 5 PM the following business day.
Important Foreclosure Auction Terms to Remember
Types of Live Auctions
Important Auction Terms and Concepts
Property Status Terms
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How to Conduct Due Diligence?
The following are a few handy tips to conduct due diligence on foreclosure properties before you decide to bid on them in an auction:
- Carry out a drive-by inspection of the property without disturbing the existing tenants, while being cognizant of applicable laws, including those against trespassing.
- Perform an in-depth review of the property title.
- Get in touch with local experts for ground-level insights about the neighborhood and a real estate attorney about zoning regulations.
- Generate at least a rough estimation of costs and budget to prepare for potential renovations and contingencies.
- Ensure that the property has appropriate liability insurance coverage.
How to Prepare to Fund In-Person?
Checking some of these boxes can keep you ahead of the curve when it comes to foreclosure auction bidding:
- Maximize Spending Amount: A shrewd move would be to bring the maximum amount you are willing to bid at the auction.
- Multiple Cashier’s Checks: Coming to the live auction with multiple cashier’s checks makes it easier to get an immediate refund in case you overpay.
- State-wise Specificities: Bidders must be aware that some states may require full payment for the property right after the auction, on the same day.
- Payment and Deed Transfer: Once you complete the payment for the property, you will receive the deed and any applicable refund within 30-45 business days.
Bidding Strategies
If you want to maximize your chances of your bid being the one that wins that property you really want, adopt some of the following strategies:
- Multiple Purchase Profiles: You can set up multiple purchase profiles with vesting and mailing information to bid on several properties simultaneously.
- Remote Bid: Leverage Auction.com’s pioneering online auction platform to bid on properties from any device without attending the auction in-person.
- Advance Bid: Set your maximum bid in advance so that you can skip having to monitor bids in real time.
- Multiple Bids: To increase your chances of winning a property, you may bid on multiple properties across geographies.
Post-Auction Process
- Submit Vesting Information:
Provide your vesting details and pay for the property at the auction to receive receipt of sale. - Deed Issuance and Refunds:
The foreclosure attorney will process your deed and any applicable refund within 30-45 days. - Property Possession:
The buyer is responsible for taking possession of the property. - Occupied Properties:
If the property is tenant-occupied, the buyer must initiate the necessary legal proceedings.
You can learn more about foreclosure auctions by watching our highly informative prerecorded webinar from the Buyer Success Team at Auction.com. You can browse Foreclosure Properties on Auction.com by clicking the link below.
Find Foreclosure Properties on Auction.com
