Foreclosed Auction Property
Foreclosed auction property purchases are available online and some can be viewed in person. Buying a property through an auction i.e. buying a foreclosed property is the most profitable and common way to make money in the field of real estate.
It’s the simple ole saying…Well actually two of them.
“Buy Low And Sell High” and my favorite one, “You make your money when you buy a property.” IE: You “lock” in your profit when you can buy lower then the market price.
But if you do not know how to buy a foreclosed property, it can also turn to be the easiest way to loose lots of cash quickly. Most disasters occur due to over bidding on the property without assessing the real market market value properly.
Many new Investors also forget about the fix up costs of the property in the bidding.
A foreclosed property can go from a great deal to a bad deal depending on the research you did.
Foreclosed Auction Property Locations
Auctions of foreclosed property are held at public auctions, these auctions are conducted under the supervision of the county or state court where the property is situated. This works in favor of the buyer as the transfer of title is immediately executed upon winning the bid. In most of the cases the winning bidder is the lender who has requested the foreclosure of the property in the first place. Normally this happens when a home owner has defaulted on their loan early on, and the principle owed is still high.
In Texas, which is a Non Judicial state, foreclosure laws are already written and follow a set process. The Counties of Texas have their foreclosure sales on the 1st Tuesday of every month. This includes holidays. You will find the locations of the sales are varied, but normally are just outside the Court House doors or nearby in a location that will handle a larger group of bidders. Here is the list of Texas County websites where you can start.
The link for the County websites will allow you to start connecting with the staff that can help you with questions about the sales. Texas auction property sales are fast moving, and you will need to pre register and in most cases has a certificate proving that YOU do not owe any property taxes within that County to bid. This requirement is mandatory when bidding on Tax Foreclosures but some Counties now require this certification for Deed Sales
Foreclosed Auction Property Websites
There are many “Auction Sites” on the web today. Taking my experience as a Listing Agent for Banks and Lenders, I have narrowed down the massive list to a few REAL sites that can be used to purchase foreclosed auction property.
You will need to register and set up your account for bidding and payment. The websites are used for the bidding process, much like eBay. The bidding usually ends on a certain hour and bids are entered from the web AND also from the physical property itself by attendees. Usually there is staff from the auction company entering in live bids.
Auction.Com usually has a good supply of homes for sale.
Foreclosure.Com is another national site for auction properties.
Hubzu.Com is a large national auction website
HUD Homestore is a massive website where you can search the USA for homes.
Fannie Mae Homepath website has their listings, but sometimes you find auction sales.
Foreclosed Auction Property Pros And Cons
Let us look into the pros and cons of buying a foreclosed auction property.
If we go for the advantages, the main advantage of buying a foreclosed property through an auction is the profitability, i.e. the difference between the highly discounted price and the estimated value you can sell it at. A normal foreclosure auction property has a six-week notice enabling the interested buyer to inspect the property and assess its total cost including the fix ups and other issues and research the market price at which it can be disposed of. One must always remember that bidding at a foreclosed property auction need not be competitive but based on what you assess.
For the disadvantages, the main disadvantage in buying a foreclosed property from a court auction is that it requires a lot of capital investment. The payment period is very short and one should be ready even before bidding to successfully buy a foreclosed property. A major disadvantage would be transfer of title as it involves a great risk. If your research is not correct or incomplete it could lead to major losses. If the risk is high the profit will also be better provided you be careful and do a significant research before buying one.
Better yet, call me and let me guide you as my Client. Costs you nothing. The Sellers pay a fee for an agent to bring them a Buyer. I can help you with the process of evaluating investment property and know the ropes on bidding and estimating repairs.
Buying a foreclosed auction property involves a lot of learning. Smart investors have been known to experience the darker side of buying and selling the foreclosed properties. If one is careful he can make some profit. Then on the other hand rushing into deals with minimal research can empty your bank account pretty quick.