What to Expect in a Foreclosure Auction

At most foreclosure auctions, buyers must pay cash for the property.

Property Sold to Highest Bidder

A sheriff, attorney or authorized auctioneer is in charge of taking bids on the property in a trustee's sale. Bidders must bring cash or a certified check as payment. During the auction, individuals call out or use their bidder's card to announce their bids. The auctioneer identifies the highest bidder and he must pay the full amount to receive the trustee's deed for the property.

Minimum Bid Set By Lender

Auctioneers use similar bidding procedures for reserve foreclosure auctions. However, in a reserve auction the auctioneer must start the bidding process with an opening bid set by the lender. The individual that offers the highest bid above this amount will receive the deed to the property in exchange for an initial cash or certified check deposit with the balance due at a later date.

Bottom Line

Most foreclosure auctions are considered reserve auctions in which an opening bid is set. The successful bidder is the one that calls out the highest bid above this amount and he is required to pay with cash or a cashier's check in order to obtain the deed to the property.

References

• BiggerPockets: The Foreclosure Process
• Auction Marketing Group: The Foreclosure Auction