Foreclosure Bidding Instructions
Bidding on a foreclosed property takes research and cash on hand. Once a bank retrieves real estate from homeowners who are not satisfying their loan payments, the bank may try to sell the real estate at an auction before the property is listed on the market. Prior to arriving at an auction, you will have had a chance to review the list of homes available and inspect them, if possible. Calculating the cost of repairs needed or liens against it will help you determine the property's value. Know what you will bid on and the maximum price you are willing to pay and do not go over that amount.
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Instructions
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Confirm with the lender prior to arriving that the auction will be held as scheduled. Sometimes auctions are canceled or postponed because the borrower is attempting to make the account current.
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Take with you at least 10 percent in cash of the projected purchase price of the property that you want. This will be required if you are the highest bidder. Some auctions require payment in full right away or will give you 24 hours to 30 days to come up with the money. Either way, you will need to ensure that you have enough cash or a loan to close the purchase.
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Arrive on time. Bidding happens quickly at most auctions. Any delay may cause you to miss the property on which you had intended to bid.
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Do not bother asking other bidders for advice. These are the people who will be competing with you during the auction. In general, they will not be interested in offering any information regarding any aspect of the auction.
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Find out how the bid process will work for that auction. Some auctions require you to place the bid in writing, while others will have you shout out your price. It's best to know this ahead of time, so contact the lender or auction company for instructions.
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Bid up to about 60 to 70 percent of what you perceive the market value to be, especially if you have not had an opportunity to inspect the property. You will be buying the property as is, so this will give you a cushion in case major repairs are needed.
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Arrange for the payment and title transfer once you have a winning bid.
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