Participating in a foreclosure auction can be an exhilarating yet risky experience. Once the pre-foreclosure period has lapsed, buyers and the lender compete at public auction to possess the property. Conditions at public auctions can get quite feverish. Buyers with lots of cash on hand often spend hundreds of thousands of dollars out of pocket to snatch up bargain foreclosed properties.
If, for whatever reason, the property doesn't sell at auction, the lender, usually a bank or the federal government, then possesses the property. Banks generally don't like to hold onto foreclosed properties, and so investors can usually purchase these homes after auction through what is known as an REO sale. That said, foreclosure auctions offer the maximum opportunities for gain. Wise buyers can purchase decent homes for less than half of their real market value. (In addition, you don't have to deal with the seller directly.)
This is not to say that there aren't drawbacks to purchasing at auction. You don't get a chance to check out titles in advance, and you have to pay cash at the time of the sale. To protect yourself against the potential negative effects of auction investing, research great foreclosure properties in your area here at ForeclosuresDaily.com.
This website contains a wealth of specs on lis pendens cases, bankruptcy cases, and pending auctions. You can speak with an operator about your specific investment questions, access a routinely updated online server, sign up for state of the art training, and build your negotiating savvy. Finally, it is recommended that you attend at least one auction in person before bidding on properties yourself.
