Foreclosure Auctions
Biggest Misunderstanding About Foreclosure Auctions
Foreclosure auctions drive big crowd. And, many people assume that they are bidding on the foreclosure property. This is not true. You bid on mortgages (liens) on the property. Nothing more.
Check your state's foreclosure law: When your auction bid is the highest, you simply own a controlling interest in the property. As a result, junior liens are still valid (hope that you do not buy junior liens that are wiped off after foreclosure auction). On some occasions, banks holding second liens may buy first mortgage (senior lien) to protect their interests.
If your state has foreclosure process in favor of judicial type foreclosure, your ownership may wait until the end of foreclosure redemption right period.
While junior liens are wiped off after foreclosure auction, tax liens prevail. Always check if homeowner has any unpaid taxes.
Examine terms of foreclosure auction: You must carefully examine the terms and conditions of foreclosure auctions before your participate. Here are some important terms that you need to check:
- Insist on foreclosure inspection, including appliances. Take photographs to make sure that every components, appliances, and attachments stay after foreclosure auction sale.
- Make your bid just after the “going twice…” announcement to be more effective and deterrent.
- Make a slightly higher-than-expected offer to shut up your competition. For instance, make $200 dollar higher bid while bidding is going in $100 increments. However, do this when the number of competitors is significantly less than in the beginning.
- Check your competitors: are they patient or excited to keep bidding.
- Finally, never get emotional and never exceed your planned maximum bid.
- Check whether they will give you title insurance.
Posted: November 5, 2008 ...................................Post a comment
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