How to Buy Homes For Cheap Using Real Estate Foreclosure Auctions

If you are in the real estate business, then you might already know that the cheapest place to buy the best property is the real estate foreclosure auction. You can actually get the property for peanuts. This is a very profitable strategy for professional real estate agencies.

Background Research

You should have a fair knowledge of the market if you want to get the best deals. You have the option to subscribe to periodic e-newsletters.

If you do not have enough knowledge about the local market then you might get yourself into some trouble, as you might later find out that the realty rates were already too low in that area.

First of all you need to prioritize your market and then remain in touch with the current affairs for quite some time. After that you should start bidding in auctions.

Bidding Etiquette

You can do some smart business and deal directly with the owner of the realty before it is put up on auction. Actually this is totally ethical and more profitable for you. The mortgage lenders also like this as it becomes a lot easier for them, rather than organizing and managing an auction.

However, if you do not reach an agreement over the rates with the other party you can always go for the bidding. The bidding, mortgage and foreclosure laws vary from state to state, so you would have to do a bit of research in this area.

If you know all the provisions regarding the whole process then it will be a lot easier for you to win the bid, by providing you an intellectual advantage over the other bidders.

What Should I Bid?

You should never bid anything that is greater than 20 % of the actual value of the property that is being auctioned. The estimated actual value can be found out from the property evaluation reports.

It is a standard practice to have a look at the property before you bid on it. You can also hire the services of a professional inspector, if you want.

In some states the laws require you to make one hundred percent down payment in case you win the bid.

So, as I said before, you will have to study the laws of foreclosure in detail. This is very important otherwise you will be stunned if you would be asked to make the full payment at the auction site.