Foreclosure auction is the stage of the foreclosure home process when the pre-foreclosure phrase of a foreclosure home has ended. Lenders will bring the title of the foreclosure home for auction and looking for new owner of the foreclosure home. The purpose of the lenders putting the foreclosure home on auction is to recapture the losses that the previous owner caused. To bring back your favorite foreclosure home, a few preparation must be done, which are :-
If you are seeing a foreclosure home, you must first do a title research on it. The goal of doing the title research is to determine all the liens or judgments against the foreclosure home. These can include civil lawsuit judgments, unpaid personal property taxes and state and federal tax liens. This is because if you got the hammer knock on the foreclosure home, you will be granted the title to the foreclosure home subject to all liens and encumbrances. If you misjudge the hidden liens, there will be extra costs in your planning.
Secondly, after doing the foreclosure home research and info collections, you need to be ready with financing. This is because in order to bid in auction, you need cash or cash equivalent to show you¡¯re affordable to participate in auction. They will record your cash amount and that will be your limit to bid. If your bid exceeds the limit, your bid will be counted as invalid. Besides, when you present the winning bid, you will need to pay a 5-10% deposit on the spot as the conclusion of the auction while the balance of the purchase price due within a few days. You will need financing to back you up immediately.
Thirdly, the psychology preparation you need is to get yourself used to the auction environment. It¡¯s recommended that you attend the auction for a few times before making the first bid. This act will help you to get comfortable with the auction process and give you confident. Auction is very intense during the process. People will easily get controlled by the intense environment and get high in auction. This is always the cause of mistakes. For foreclosure home, if your bid exceeds the value of the house, you will earn nothing though you¡¯ve won the auction. Thus, you have to set a bottom line in your bidding and stick to it. Most importantly, stay firm with your bottom line in auction and don¡¯t easily get affected by the intense environment there.
Final words, make sure you are prepared before entering foreclsoure auction. Foreclosure auction might bring you the great fortune but in another hand, you might lose in it if you misjudge something. Be smart and be tough.