When buying a foreclosed home, the importance of understanding the process cannot be overstated enough. If you pursue buying a foreclosed home at an auction you will have less competition with home buyers in the traditional market, you will have competition with house flippers or professional investors. Professional investors know the business inside and out and will have a
When buying a foreclosed home, the importance of understanding the process cannot be overstated enough. If you pursue buying a foreclosed home at an auction you will have less competition with home buyers in the traditional market, you will have competition with house flippers or professional investors. Professional investors know the business inside and out and will have a leg up on buyers inexperienced in foreclosure auctions.
A home can end up in foreclosure due to the owner’s failure to pay their mortgage for several months. The foreclosure process cannot begin until the homeowner is in default for 120 days. A home can also go into foreclosure if the home is owned outright but the owner has failed to pay the property taxes. In this case, it is the tax authority that will seize and take ownership of the home, whereas, in the first scenario, the lender takes the home.
Foreclosed Homes Bainbridge Island
The auction process:
- The auctions can take place at a courthouse or public spaces such as a hotel or convention center conference room. In some cities, auctions take place exclusively online.
- Once a formal notice of foreclosure is on record and goes to auction, the timeline can vary depending on the number of bidders, the experience level of the bidders, as some bidders newer to the auction world can extend the time. It also depends on if there are multiple land parcels associated with the property or house and if the auction takes place in person or online.
- If you are the highest bidder at an auction and win the home, you are legally obligated to purchase it. The funds are due at the time of purchase, and you will then receive the deed.
- You must purchase the foreclosed home with a cashier’s check. To obtain the cash needed for the home auction, some lenders will permit short time loans (this will need to be approved and secured at the time of the auction). However, these come with fees, high interest, and short-term, so you will need to transition this to a traditional mortgage if you require financing.
Foreclosed Properties Bainbridge Island
These are some basic, but important pieces to a foreclosure auction that can help save you from some costly mistakes. Hire a real estate agent who is not just familiar with only the home buying process but is experienced in helping people move through the complex world of buying a foreclosed home. We can help you avoid common mistakes and pitfalls. Contact us for more information!