Comparing Buying of Bank Foreclosures Homes and Buying at Auctions
Buying foreclosures from banks or at auction sales are two options available to investors. But as a general fact, buying bank foreclosures has been found to be superior to buying at auctions.For buyin...
For buying via an auction, first browse newspapers or online sites for homes scheduled for auctions, choose the properties that you are interested in, secure your finances before the auction date and attend the foreclosure auction where you must bid for the property. If you win, the deed of the property will be handed to you once you make payment.
For purchasing from bank foreclosures, contact banks for their REO listings, inspect the properties that you are interested in, secure your financing, negotiate with the bank, and close on the property by providing the money to the bank. The property is then yours.
In case of buying at auctions, public auctions are conducted in such a way that only those who have been long experienced in the real estate business will be able to garner good bargains. If a new bidder has successfully bid for a bargain, he may have just been incredibly lucky or has spent considerable effort studying the auction process.
While a public auction is conducted, bidding proceeds quickly and at a frenzied pace as a result of which a novice bidder might get enticed to bid for the property at a value greater than the value of property in the market. Another problem is that all properties look great on the outside but some may hide defects which can be repaired at only great expenditure. There is a catch to auctioned properties that their interiors cannot be examined before the auction and one has to be satisfied with views of its external features. In addition these homes can have defects in its title such as mechanic’s liens, tax liens etc. or a worse possibility of a second mortgage costing several thousands of dollars.
Even worse is an online public auction. One can get information on the properties only by the photo and meager amount of information provided. Media reports consist of complaints by several hundreds of people who were defrauded of money by bidding for assets via freshly launched online foreclosure auctions when they discovered that they had bid for tax liens and not properties.
Contrary to this scenario, investing in Bank foreclosures is pressure free and risk averse. Any investor can rest assured that the Bank owned property is free of encumbrances such as unpaid taxes, inspection fees and HOA fees. The investor also has the opportunity to inspect the property before closing and also to work with a real estate professional to get a good deal out of bank foreclosures.
Also, bank foreclosures can be bought with loans from FHA or any number of loan options found in the mortgage market.
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ABOUT THE AUTHOR
Fiona Livnat is an author with expertise in real estate foreclosures. She has over ten years of experience in writing about foreclosures. Her commitment to help people is reflected in her writing. For more details please visit bank foreclosures.