What Is the Process for Purchasing a Home Through a Public Auction?

Homes purchased at public auctions often are a better buy than homes at market value.

Public real estate auctions typically include homes that are available because of foreclosure by a lender due to default on a mortgage or by the county due to unpaid property taxes.

Auction Dates and Times

The date and times for foreclosure and property tax auctions are advertised at least 30 days before the auction date. The county recorder's office displays the information at the courthouse. Many county courts also publish preliminary auction information online.

Bidding

At a public home auction, buyers participate in a public outcry auction conducted by the county sheriff's department. Depending on the county, the auction occurs either at the courthouse or in front of the property. The property is sold to the buyer that has the highest bid.

Terms of Payment

States have different laws requiring acceptable forms of payment for a home won at auction. Winning bidders have 10 days to produce proof that they can finance the properties or to produce a cashier's check for payment, and they must close escrow within 45 days. Once escrow closes, the property transfers ownership.

References

• Realty Trac: Foreclosure Overview & Foreclosure Process
• MSN Money: The Safest Ways to Buy Foreclosures
• Realty Trac: How to Buy a Home at Auction