There are two ways where you can buy foreclosed homes: first is through “auctioned on the courthouse steps,” and second, via buying from the bank.
Auctioned on the Courthouse Steps
Before a bank can repossess a house, the bank has to go through the auction process. In this auction process, the general public can also bid.
While this process is called “auctioned on the courthouse steps,” not all auctions are held in courthouses. Some auctions are held in the auctioneer’s office, local sheriff’s office; while some auctions are handled by attorneys.
In buying foreclosed homes through public auction, please take note of the following:
- Prior to the auction sale, you cannot see the house.
- You need to bring with you 5-10% down payment.
- If you do make the winning bid, you may have to evict the existing occupants.
Buying From the Bank
In most cases, the bank buys the property back during the auction.
In buying foreclosed homes from the bank, you may be able to get a “pre-inspection” if you are in a competitive bidding situation. This “pre-inspection” will enable you to check for expensive flaws of the house.
Almost all bank-owned foreclosed properties are listed on an as-is basis. This means that the bank will not repair defects of the house. However, even though the bank-owned foreclosed property is listed on an as-is basis, the bank may pay for the repairs if the property has been sitting around for some time.
It is important to purchase a quality owner’s title insurance policy, whether buying a foreclosed a home through auction or through the bank. This insurance policy will protect you in case someone comes along in the future and claim that the foreclosed property is theirs.
Visit My House Zoom for a list of foreclosed homes.