Foreclosures Auction: Buying from Court or Company Auction

You can buy a foreclosed home at a foreclosures auction conducted by a court or a trustee or at an auction held by an auction company.

Are there significant differences? Yes, there are. In many cases, you can buy a foreclosed home at a public auction conducted by a court at a much lower price than a similar house sold off in an auction held by an auction company. This is because some banks which have foreclosed on the homes do not want to take back the homes; they just want to recover as much cash as they can from the properties.

There are however risks from buying homes at foreclosure auctions conducted by courts or trustees. Remember that these homes have just been foreclosed, so the homeowners may still be occupying the homes. As there are still occupants, you may not have the heart or you may not be in the right position to inspect the houses in foreclosure.

There are also cases that homeowners can still remedy their financial problems and be able to redeem their foreclosed properties just before the court-supervised foreclosure auction or during their redemption period in states that honor this rule.

On the other hand, a foreclosures auction conducted by an auction company is more organized. Since the foreclosed properties being sold off in this type of auction are already real-estate owned, you can now inspect the properties freely by just contacting the listing agents of the auction firm or by just viewing the properties on the web sites of the auction firm.

In most instances, auction firms even allow you to submit your bid before the scheduled auctions. Just be prepared with your check and cash because auction firms require you to register and make your deposits before bidding and then give you only a few days to complete your purchase. Additionally, most auction firms require cash payments and do not offer financing.

Both court-supervised and company-administered foreclosure auctions indicate that the properties are sold off on an as-is basis. But in a company auction, you can do a more thorough inspection on the home you want to buy. The auction company also provides you with title insurance, assuring you that the property title has been checked.

In a public foreclosures auction, you need to search public records and do the title search by yourself or hire a professional to do so.

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