Homes become available for foreclosures when the home owner fails to make payments on his loan for a considerable amount of time, and as a result the loan goes into default. The home owner is given a grace period to pay the default loan, but when he still cannot make the payments, the house sells at the foreclosure auction. The following points can help to successfully bid and strike a great deal at the auction:
Look for foreclosed homes
It is very important to develop a tracking system to get the latest auction information. You can look up the newspapers or the websites for advertisements about foreclosure auctions. If you are looking for foreclosed homes before the foreclosure auction in Orlando, then the typical advertisements would be something like, “buy my house Orlando”, “buy my house now Orlando”, “buy my home Orlando” or “need to sell my house fast Orlando”. However, at the foreclosure sale, you will use a list from a provider to track the houses being sold.
When you have located a foreclosed home, it is always beneficial to visit the home to get a better idea about the condition of the home and its neighborhood.
Make sure about the auction status and the bidding procedure
It is not uncommon that the home that was once available for auction is no more available. When the property is scheduled for auction, the owner can still stop foreclosure auction by paying the amount due to the lender. So make sure about the status of the auction; if it is postponed then ensure that you have got the new details. The bidding procedure may vary from one state to another. So familiarize yourself with the bidding procedure of the particular area.
Bidding at the auction
Before bidding at the auction, it is important to know the estimated market value of the property and if the owner has any liens against the property. The opening bid amount usually includes the total amount owed to the lender plus the fees incurred to carry out the foreclosure proceedings. It is important to know the opening bid amount, so that you can evaluate the bargain potential by comparing the amount to the market value of the property.
Once you have determined the bargain potential, then depending upon your financial capability, you will get a fair idea about the amount you should be bidding for the property. If you are able to get the property for at least 30% below the full market value, then it can be considered as a successful purchase. Other factors that can help to make an informed decision about the bid amount are the rate of real estate appreciation in the area and the potential for increasing the worth of the property by making repairs.
After the auction
If you have won the bid, then ensure that you have got all the necessary documents from the auctioneer. Also, clarify with a real estate attorney and the auctioneer about the further proceedings that need to be fulfilled before you take possession of the foreclosed home. If you have done a thorough research about the foreclosure auctions, then there is a great potential for striking the best deal.