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An investor can check on the real estate auction besides the local property listing services. Experienced investors are always interested in buying properties at auction. Today, technology has simplified the home auction process, even novice investors can participate.
Foreclosure purchases cannot be funded using hard money loans directly. There are many indirect ways to fund foreclosure and auction loans. It helps to increase the investor’s chances of buying undervalued property.
In-person or live foreclosure
Live foreclosure is open to the public. This ensures that the foreclosed home receives the highest possible recovery for the borrower to pay the lender or bank. For-bidding at the auction, you will need to register and reveal that you have enough funds for paying against the property.
Basic steps to participate in live foreclosure auction
- Keep track of oncoming foreclosure auction in places you wish to buy.
- Read and understand the transaction and document details before the auction starts.
- Research the property’s estimated resale value, how much mortgage is owed and are there other liens against the house. [Hire a real estate lawyer to do a title search on the home you are interested to bid on].
- If possible, drive around the home to see its external appearance. This can give you an idea of what the condition will be on the inside. You can figure out the extra costs of repairs and bid accordingly.
- Check the financing options because in some states you have to pay a percentage after the auction and rest in a specific timeframe. In a few auctions, the advance deposit is needed which can be 5% to 9% of expected final bid.
- Reach 1-hour before the auction starts. You will need an Auction bidder card. Be prepared to raise this card as soon as the auctioneer announces a figure you are comfortable with.
- If you win, then the payment in full or partial will need to be done.
- You will get a sale certificate or deed and the other paperwork as per the state’s specific laws.
- The title certificate will take a couple of weeks.
[Never work on the property until you receive the title certificate because the original owner can pay the owed amount in full or file an objection]
Online auctions are also conducted in the same way, but you don’t need to go in-person. There are many other advantages of buying foreclosure properties online. Visit capitalfund1.com for hard money loans to increase your liquidity and invest in foreclosure property.