When a home or property owner has defaulted on the terms their mortgage, the lending institution has the right to recover that property. The final step in the process is the foreclosure auction where the lender sells its right, title, and interest in the property to the high bidder. After required statutory notice to the borrower, the lending institution uses a professional auctioneer who promotes the auction in addition to posting legal notices required by law.
Where do I find auctions?
Home and property auction listings can be found in public records in your city/state and through a variety of online resources. Find property auctions with ApartmentStores Moving and Relocation.
What preparation should I make before I go?If it's your first auction, you should familiarize yourself with the process before you go. Attend an auction to observe the process before bidding on a foreclosed property. Research your state's specific foreclosure lawsResearch the property in advance and know how much it's worth, how much is still owed and if there are any liens against the property. In most cases you will not be able to inspect the property before the auction.Have your financing prepared. If you're not a cash buyer, get pre-qualified for a mortgage loan or check your credit history before you apply for a loan.Determine the bidding requirements. Most auctions will require a deposit which any potential bidder must bring to the auction in the form of a bank treasurer's, cashier's or certified check payable to him/herself. Some states require the entire amount to be paid at the close of auction.
What happens at an auction?The auctioneer will inspect the deposit checks of qualified bidders and record their names addresses and phone numbers.A legal notice will be read that lists the parties involved, when the mortgage was given, the legal description of the property, and the terms of the sale.There will be a question/answer session for qualified bidders after which bidding begins.Typically, the opening bid is based on the total amount owed to the foreclosing lender, interest incurred, late charges, penalties any liens placed on the property by other institutions, and may include fees incurred because of the foreclosure proceedings
What happens if I'm highest bidder?If you are the winning bidder, endorse the deposit check and sign a memorandum of sale (purchase & sale agreement). You will be responsible for any liens having a priority over the mortgage being foreclosed.Auction purchases are "as is" with no warranties given and no title insurance provided. Closing terms are outlined in the Memorandum of Sale read by the auctioneer at the start of the auction.If the property is occupied at the time of auction, it is the winning bidder's responsibility to evict the tenants or otherwise make arrangements.
If no one at the auction bids above the opening bid amount the foreclosing lender gains possession of the property.
Because foreclosure procedures vary from state to state, it's important that you become familiar with the foreclosure process in your state (or the state the property in which the property is located).
If you're ready to get started, find foreclosed homes for auction with ApartmentStores Moving and Relocation.