- The last step to the foreclosure process is when the property is auctioned at the courthouse of the county where it is located. Anyone can go to these auctions and if financially able, bid on the property. There is an announcement in the local newspaper as to when the auctions are held and the terms of the sale. The start price of the bidding will also be posted in the newspaper ad. Normally the successful bidder must have at least a 10 percent deposit the day of the sale and must pay the remainder within 30 days. This does not mean the buyer must have cash, but be able to obtain and close on a loan within the allotted time. If no one bids on the property, the bank who holds the mortgage retains ownership.
- The bank or lending institution that holds the mortgage on a property is usually listed in the newspaper ad for the foreclosure sale. If there is none listed, they may be listed in the county's tax records. Anyone has access to those records either online or by going to the records room and looking up the property. Once the name and address of the lender is located, a letter can be sent to their real estate department along with a letter of intent to purchase the property. The lender likely will not hold the property very long before listing it with a Realtor, whom interested parties could the contact. Banks usually require special addenda to the purchase contracts specifying the buyer understands that the property is being sold "as is" and the bank has no intention of doing any repairs or paying for any inspections. Most of these properties, though, are listed for sale at a lower price than comparable properties on the market.
- When a property that is financed using a FHA loan goes to foreclosure, it will be referred to as a HUD foreclosure. These properties are all listed with a Realtor chosen by the HUD office in the local area. Any Realtor who wants to be able to show these properties to prospective buyers must be approved by HUD and obtain a certain key or lock box code. All contracts for purchase must go through the listing Realtor. The VA works in much the same way. It has a single company that manages its foreclosed homes. The difference with the VA is that it takes all offers that come in for a certain amount of time and look at them at the end of that time period. The highest offer gets the home. The VA also offers closing costs and sometimes financing on its foreclosures, but it does not do repairs. Oftentimes there is no down payment requirement because the price already has built in equity. VA foreclosures can make excellent investment properties.
