How to Bid on a Forclosure

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By Gardengates
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How to bid on

Home prices are lower than they've been in a very long time and there are some homes available for great prices as foreclosures. But if you are going to enter the world of buying a foreclosed home, you should be prepared with some knowledge on how to bid on a foreclosure.

Difficulty: Moderate

Instructions

Step 1

First you need to be clear what you are bidding on. If you are bidding on a bank foreclosure, all you have to do is satisfy the bank's demands, much like bidding on any regular piece of property. If you are in an auction, then the highest bidder can always outbid you until the sale is finally closed. Once the bidding ends, the house is officially sold and no more bids will be accepted. There are different laws, regulations and guidelines in different cities and states for bidding on a foreclosure so do your research before entering into an auction.
Step 2

Find out the going prices for comparable homes in the neighborhood. You might want to check with local real estate agents and see what the comps are. You'll also want to find out what the fair market value is of the foreclosure home in question.
Step 3

Decide how much you want the house. Are you looking to get a "steal" or do you REALLY want this one. If you really want this piece of property you should consider matching the list price or even bidding a little higher. If you are looking to grab the best price and are willing to lose the bid, bid lower than the list price and hope for the best. Take into consideration how much you will have to spend on the foreclosed property to fix it up as well as checking out the neighborhood. Remember you will need the cash to pay for your bid plus taxes and any other related expenses right then and there if you win your bid on a foreclosure at an auction.
Step 4

Beware of hidden costs. There can be property taxes or IRS liens that come along with the house. If you buy the house "as is" you may have expensive repairs that may not be readily visible. For more information on how to buy a foreclosure, please check the Resources listed below.

Comments

MarlaineMarie said

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on 3/28/2009 We are thinking about looking into this and I will keep what you said in mind when we are ready to buy!

GreenGardenChic said

on 3/6/2009 Perfect timing, I had no idea about the hidden cost. Valuable info to know

SeventhSibling said

on 3/5/2009 With the tips from your article, maybe someone who thought they couldn't afford a home can follow the American dream toward home ownership. Nice job.