Foreclosure Vs. IRS Auctions

Purchase houses through the foreclosure process or an IRS auction

Auctions of real estate properties offer foreclosed homes from either a mortgage lender or the Internal Revenue Service (IRS). Both mortgage lenders and the IRS have very clear guidelines regarding the sale of real estate. Be certain to check the terms and conditions prior to purchase.

House Foreclosure

A house foreclosure occurs when the homeowner ceases to make mortgage payments to the lender. When this happens the lender begins the process of foreclosure, or taking ownership of the house, thereby terminating all homeowner property rights.

Foreclosure Sale

Foreclosed properties can be sold at a public auction or listed with a real estate agent. Public auctions are announced in the classified section of newspapers. The money from the sale of the property is applied toward outstanding debts, such as mortgages, attorney fees and real estate agent fees.

IRS Property Acquisition

The IRS seizes and acquires real estate properties as a result of nonpayment of federal taxes. Once a property is seized the IRS then announces sale information on its website.

IRS Auction

Once the IRS seizes a property it must be sold via public auction or sealed bid auction. The property is then sold to the highest recorded bid. The IRS announces the terms and conditions of each sale on the IRS website only.

Purchasing Property

Purchasing real estate at an auction requires exact funds for the purchase, usually as cash or certified check. Ensure there are no property liens prior to purchase, as new owners may be responsible for any liens attached to the property. Inspect the property as much as possible prior to offering a bid. Most properties at auctions are sold without warranty or regard for the condition of the property.

References

• Investor Words: Foreclosure Definition
• IRS: Auctions of Real and Personal Property
• IRS: Property Auction Information