It is likely that when you hear about government foreclosure you think of the police storming in and taking over someone’s home. Not many people realize that banks are not the only ones who can foreclose on property, because the government can do the same and not just to homes but also to boats, ranches, and farms. For example, if you owe a lot of back taxes or default on a veteran’s assistance loan, the government can foreclose on your property.  A government foreclosure auction is held to resell this property, although the government also reserves the right to hand it over for social uses.

The Process

Finding government foreclosure auction listings for free is rather easy these days. There are paid services, but there really is no point in paying for what is widely available for free. The simplest way is to find the U.S. Department of Treasury website and find their listings. You won’t just find homes and farms listed, but often will find cars, boats, office equipment and sometimes rare books.

Learn Your State Guidelines

Participating in a government foreclosure auction is not the same as other auctions where you raise a hand to win and immediately take possession of your new property. The procedures of how and when you place a bid will depend which state you live in. In some states, you only need to bring ten percent of your bid with you in order to win, but in others you need to bring the full amount of the property. Make sure you are clear on what is required in the state your auction takes place in, so you are prepared to pay whatever is required up front.

Caveat Empor

One of the disadvantages of any kind of real estate auction is that once it’s yours, you can’t back out of the deal. Just as with buying a home through any other means, you need to find out as much information about a property up for government foreclosure auction as possible before you bid. To ensure that you make a good purchase, you must look into the property to see what condition it is in.  Since some properties may still be occupied, it can be difficult to inspect the property.

It is possible to buy a home directly from the homeowner before it goes to auction if you are sure you want to purchase it that badly. Many homeowners are interested in these deals because it stops the government foreclosure auction. But you have to check with the broker assigned to handle the auction. Again, laws vary from state to state.

U.S. government agencies do not actually directly oversee a government foreclosure auction. It is a common joke that if they did nothing would ever get sold! Brokers and real estate agents are put in charge of the auction and making sure everything is done according to that state’s law.

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