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I have heard buying at a foreclosure auction one can get deals. Is this something that is easy to do?
While it is sometimes possible to get great deals at a foreclosure auction, buying at a foreclosure auction is not for beginners. Most foreclosure auctions are conducted by either the county sheriff or under the auspices of the county sheriff through a court approved auction company. The date and location of the sale should be available from the court and usually from the lender's attorney. In Cook County most foreclosure auctions also appear on Cook county foreclosures or Cook county foreclosures Procedurally one of the biggest obstacles for a purchaser is financing. Most foreclosure auctions require 10%-25% of the bid (purchase) price by the end of the auction and the remainder of the purchase price within 24 hours or the close of the next busisness day. You will not have time to get a loan. This means you basically have to be a cash buyer. You will be bidding against the lender who must bid fair value. Another drawback is you usually will not be allowed to see the interior of the property prior to auction. You will be buying the property totally as is. If the house is totally destroyed on the inside, it will be your house, your problem. There can also be title issues and other liens which could dramatically affect the value of the property. You need to have an attorney conduct a title search for you prior to auction. For most purchasers, a much better option is to let the lender buy it at auction and then buy it from the lender. This will give you time to get a loan, inspect the house and have the title issues researched. Most banks have real estate owned units that are charged with selling foreclosed properties. Contact the bank or mortgage company and just tell them your interested in purchasing a property that they acquired through foreclosure. Lenders are usually very anxious to get rid of these properties. If you believe there is significant amount of equity in the property, you can try to buy the property pre-foreclsoure directly from the owner. NOTE: The answers above are intended to be a brief summaries of the law only. Parts of the answer may or MAY NOT be applicable to your situation and/or your local jurisdiction(s). Any information provided DOES NOT constitute legal advice and should be supplemented with the advice of an attorney licensed to practice law in your locality. |
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