Court Auction For Homes - the Secondary Phase for Foreclosures
A foreclosure is plainly understood as the legal process that is instituted by the lender in a mortgage loan after a borrower’s default or failure to pay. The end of the pre-foreclosure phase of the property is signaled after a homeowner has failed to get back up to date with their mortgage payments and the bank takes legal possession of the property. Then, the next stage follows in the form of a court auction. The Lender hopes to quickly recover his/her capital by selling to the highest bidder in this court auction
Everyone knows that an auction is a good venue for one to buy a property at really bargain prices. However for first time purchasers or bidders, there are a few things you need to know before getting into an auction and these are as follows:
Preparing for the Auction:
The Opening Bid: The opening bid is often determined through the total remaining loan balance, court costs, interest and back taxes, legal fees and liens and judgments. This should be made known as the winning bidder will be obligated to fulfill these. The trustee establishes the opening bid prior the auction proper. Should no one go beyond the opening bid, the property will be taken back by the lender and this becomes Bank Owned.
How to Bid: Bidders approach auctioneer one at a time with cashier’s check or cash on hand and bidding over a previously recorded amount is not possible unless you have an additional check or cash to show. One’s capacity and limitation to bid will be determined by the auctioneer in accordance to your check or cash proof. Remember that before the opening bid the trustees reads all legal description and terms of sale for the property so you will have a technical idea of what you’re bidding on.
The Winning Bid: A winning bid is signaled by the third strike of the auctioneers’ hammer and hence you will be expected to make a 5-10 percent deposit at the conclusion which is non-refundable. Remaining balance is expected to be settled in between 1-30 days.
Conclusion: Without a doubt a foreclosure auction is an excellent venue for you to buy properties for only the price of what is owed the mortgage which means that you will be looking at a sale that is substantially below its market value. What better bargain can there be? Just remember to look for an auction with little or limited competition.