House auctions aren’t for the timid or uninformed. Whether the house has been consigned by the owner or is being sold for unpaid taxes or missing mortgage payments, auctions are usually fast-paced events. Investors buy at auctions to get a deal. It is important to carefully prepare for the auction before bidding.
Read the legal section of community newspapers, search online or find advertisements to locate property auctions. Auction companies sell houses consigned by the owners. The county tax collector usually organizes the auction of tax lien properties. Foreclosure or sheriff’s auctions are often held on the steps of the local courthouse.
Find the date, time and site of the house auction. Some auctions require the potential buyer or the buyer’s agent to bid in person. Other auctions are held online during a specific time period. Sometimes bidding is possible in person and online.
Obtain a list of houses facing auction. Before the auction, information about the houses is often found online and in an auction book. Find the minimum bid for the houses. At tax lien and foreclosure auctions, the minimum bid is often the amount owed plus the cost of the auction.
Locate the address of the house. If possible, attend the open house or inspection day and carefully evaluate the house and property. Perform a title search and identify liens and encumbrances. Many auctions sell the homes “as is” with no warranties or guarantees.
Read the auction rules. Eighteen is usually the minimum age for bidding. Many auctions require all potential bidders to register and pay a deposit. Photo identification is usually required. Potential bidders are often given a bidder’s number after registering.
Research the required type of payment for the auction. Often a major deposit or payment in full is demanded at the conclusion of the auction. Usually a cashier’s or certified check or cash are the only forms of payment. Some auctions charge a buyer’s premium, which is a fee, based on the purchase price of the house.
Arrive at the auction on time. Listen closely to the auctioneer. The houses are often auctioned quickly by progressive voice bidding. A raised hand or bidder’s number is usually interpreted as a bid. The highest bidder identified by the auctioneer buys the house. Once the auctioneer records the bidder’s number, the purchaser has a legally binding contact to buy the house. Follow the auction rules to pay for the house and take possession.
Houses sold at foreclosure or tax lien auctions may require significant repairs or upkeep.
- Los Angeles County Treasurer and Tax Collector: Annual Public Auction Tax Sales Frequently Asked Questions
- U.S. Department of the Treasury Seized Real Property Public Auctions: Frequently Asked Questions
- Michigan.gov: Frequently Asked Questions Tax Foreclosed Real Property Auctions
- MSN Real Estate: 12 Tips for Buying Foreclosures at Auction
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