Are you wondering if it is actually possible to save a good deal of money on your next home? If real estate investors aren’t landlords, then chances are they have been buying and selling properties they have discovered through real estate foreclosure auctions. You have to get a low buy in and sell for much more in this market, so it is much like investing in the stock market. Participating in a foreclosure auction is a great way to buy low.

Looking into Your Market

There are services easily accessible which show foreclosure auctions happening in every state, but it is a mistake to blindly buy property in a market you aren’t familiar with. For example, a devastated area in Florida where the homes have been wiped out by a hurricane will not be a good market to invest in, but you may not know about this problem if you go on limited information from these services. It is better to know which area you wish to purchase property in and wait for foreclosure auctions to come up in that given area.

Bidding Procedures

If you can contact the owner of the home before the property hits the foreclosure auction block, it is possible to buy the home before it gets that far. In general, there will be about a month where the homeowner is free to find a buyer. Direct sells during this period are often gladly accepted by the mortgage lenders who don’t benefit much from the auction process.

If things don’t work out, you can still bid on the auction. If you really want to make a bid on a property it’s your job to find the realtor who is holding the auction and determine if they will allow you to call in a bid or if you must show up in person.

It’s not up to the owner of the property to let you know all of the gory details. Since laws about bidding on foreclosure auctions differ in each state, you have to acquaint yourself with your state’s laws (or the laws of the state where the property is located).

Know Your Bid Limit

Usually, a good bid is twenty percent less than the estimated market value of the home or property being foreclosed upon. You will have to find the valuation reports, or property reports, to determine what that estimated market value actually is. However, it is urged that you not only inspect the property yourself, but hire your own home inspector to give it a once-over. Although you can get bargains at a foreclosure auction, it’s not a bargain if you bought a home just about ready to fall apart.

Remember that you need to have the money ready to go for whatever amount you bid, because you typically won’t have much time to get it paid for. You must take this into consideration when putting in your bid.

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