One of the best ways to make the most out of your real estate investment is to buy houses at below market prices. This is most easily managed through foreclosures, tax seizures, and police seizures. All of these types of properties have been forcefully taken from their owners, and all of them are going to be sold at an auction. However, their similarities end there.
There are several reasons that foreclosure auctions are the best. For example, right now there are more foreclosures on the market than ever before. Today’s economy and the bottom falling out of the housing market is a blessing for real estate investors with money to, well invest. You can easily find foreclosures to bid on, and most of them are going to be in really good shape, possibly only a few years old. Most properties seized for taxes or by police are not well maintained and are not easy to locate.
You can pay much more money at a foreclosure auction, but it will be well worth it because you’ll know exactly what you’re getting into. You can usually visit the properties before the auction. You won’t be able to walk around inside in most cases, but you can peek in the windows and check it all out. You’ll get an idea of what you’re getting and how much is a reasonable price to pay for it.
Often the banks will start the bidding at the lowest price they are willing to take for the house. If they cannot get any bidders at that price the auction will be cancelled, and the bank may try to auction again at a lower price if they cannot recoup their losses. In most cases today the amount owed on a house is so much more than the amount that the house can sell for that banks are taking huge losses anyway, so you can often get away with pushing the price down to something that can really increase your profits.
Remember when going to a foreclosure auction that you have to have the cash in hand, a cashier’s check, or a pre-approval or approval from a lender in order to bid on the house. In other words, you have to have proof that you can buy the house before you will be allowed to bid.
I visited one of these auction last friday, even though I ended up not buying anything I did see a few people walk away with what appeared to be some fabulous deals. Once I get my finances lined up I will be buying.