Buying foreclosure homes during the public auction is possibly the most common way to obtain house foreclosures. With an increasing number of foreclosures in Los Angeles, the numbers of auctions are concurrently on the rise. Foreclosure auctions are where bids are placed on the home, and the one with the highest bid gets the home.
The auction normally takes place at the county courthouse. The first bid on the home is usually placed by the lender’s representative, and the lender’s bid can surpass the amount that is owed on the mortgage. There are instances, especially when the equity attached to the home is low, that only the lender’s representative and the auctioneer show up for the auction. This results in the possession of the home being transferred to the lender.
Buying a home at an auction should not be tried by beginners who have limited readily available funds. In a large number of cases, the property goes to the winning bidder only if a deposit in cash or cashier’s check is made. The remainder of the amount also needs to be paid quickly, or you could stand losing your deposit, and the property would get auctioned again.
Looking for auctions should not be a problem. The legal sections of local news papers carry listings of foreclosure auctions. In case you have a particular house in mind, the lender’s attorney or the lender could be contacted for this information. It is always best to confirm a day in advance whether the auction is to take place as scheduled (it could be postponed by the lender or bankruptcy could be filed for by the borrower).
As the existing home owner might not let you inspect the house, driving by the home and finding out what state it is in, is a good idea. If the house in question is occupied, you can assume that the electricity and water supply have not been cut off. However, you should also presume that the home will require basic repairs and upgrades. While these might not amount to much, without looking inside the house, you should keep these estimates on the higher side.
It is best to go to the auction with a maximum limit set for the amount you are willing to bid. You would not want to get carried away at the auction in trying to get the winning bid, surpassing what you intended to pay for the property originally. Make sure you get to the auction before the scheduled time as some auctions do not go on for more than a few minutes.
With a reasonable number of homes in Los Angeles going up for auction, make sure you study your options well before taking the plunge.
Print This Post
Email This Post
HUD Fair Housing Equal Opportunity
