Buying a Foreclosure at the Court House? Here’s What You’ll Need:

In a word: CASH.

Heading to the court house to buy the home of your dreams (or perhaps just a good solid investment)? Then here are a few tips to get you started.

To bid you need to qualify, which means you will be required to show the auctioneer identification, and cash or cashiers checks sufficient to cover the FULL AMOUNT you wish to bid. Yup, that’s allot of cash, but this endeavor is not for the faint of heart.
Most investors take cashiers checks made out to themselves. If you are not the winning bidder, you can easily redeposit the funds, and if you are the winning bidder, you can endorse the check over to the trustee.

Question: How do I know what properties are going up for auction? What is the opening bid amount?

The information is public, but can be a bit difficult to obtain. To get started, you can do a search right here on my PreForeclosure and Auction search page.

The lender gets to make the first bid, which is called the opening bid. Some now also refer to it as the drop bid, because lenders now often substantially discount the opening bid from the amount owed. The lender / trustee is under no legal obligation to announce the opening bid in advance of the sale.

They typically release the opening bid the day before or the morning of the sale. Sometimes the opening bid is not announced until the sale starts. The research team at ForeclosureRadar works diligently to post opening bids as quickly as possible. The information provided on my PreForeclosure and Auction search page comes from this valuable resource.

Want to see what happens at an auction? Check these video’s out:

Foreclosure Auction on the county courthouse steps

Foreclosure Auction – Take 2

Here’s my take: Buying a property at the county courthouse steps is best left to the professionals.

Don’t get me wrong, buying a home at discounted price is a great thing. There are numerous other aspects of the process that can potentially wreck your financial well-being.

For example:

• What is the true condition of the home?
• Who currently occupies the home? the previous owner? or tenant? or squatters??
• What is the condition of title? is it clear or clouded? are there any other outstanding liens?
• There is no refund! No inspection period. It’s a take it or leave it scenario.