How to Buy a House at a Sherriff's Auction
A sheriff's auction occurs when a home is foreclosed upon due to the previous homeowner's inability to make the payments on the mortgage and repossession by the lending company. Houses sold at a sheriff's auction often sell for a fraction of the home's current market value. To buy in a sheriff's auction, you must have cash on hand, as homes must be purchased by either cashier's check or cash. If you are interested in buying a house at a sheriff's auction, there are a few ways to make sure you are making a good investment.
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Instructions
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Visit your county's office. Ask for information regarding sheriff's auctions in the area. They should be able to provide you with auction dates, venues and information on the auction process.
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Attend several sheriff's sales prior to the auction in which you plan to buy. Study how the auction is executed. This can prevent you from making a costly mistake, such as bidding on the wrong property.
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Check on the status of the house. Have a title search done to ensure there is a title for the home that includes the house and everything that you believe is included with the house.
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Find out if inspections can be done. Generally, you will not have access to a house prior to the auction, but in some instances, exceptions are made. Find out about the electricity and plumbing at the very least. If there is a major problem, these will be two of the most expensive aspects of the house to fix.
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Read the home listings. Most houses up for sale in sheriff's auctions are also listed on real estate websites. You can obtain a lot of information about the property from the listing.
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Know the value of the property to keep from overbidding. Sites such as Zillow.com and Housevalues.com offer free services that estimate home values based on location and condition of the home.
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Double-check the venue for the auction and pre-register if it's required. Sheriff's auctions sometimes move at the last minute. The county office can provide you with up-to-the-minute information.
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Tips & Warnings
Since you cannot usually go into a house before the balance is paid in full, it is impossible for banks to inspect it, making it very difficult to get loans for homes bought at sheriff's auction.
