One of the best kept secrets in the real estate world is the foreclosure auction. A bank´s foreclosure auction has been a valuable tool for big time real estate investors for generations as a way to get incredible deals on homes.

A foreclosure auction takes place every few months in most areas. They feature property and homes that the bank has foreclosed on because the owner couldn´t pay the mortgage. There are also cases where a home is being auctioned off because the owner defaulted on the mortgage due to legal problems. But whatever the case, a foreclosure action is an amazing way to get real estate for a fraction of what it would cost otherwise. Let´s take a look at how you find out about properties at a foreclosure action.

• First off, the bank that is running the foreclosure auction should have a complete list of all the properties that are up for sale. You should be able to speak to someone at the bank about the individual properties. You can ask if they have been inspected and what they think the bids will be on each individual property. Some will have a high starting price, some will start at almost nothing. You can also ask how well attended previous auctions have been so you can get an idea of how many competing bidders you can expect.

• Once you´ve set your sights on a particular piece of property, you need to learn as much about it as possible. This can be tough because sometimes you´re dealing with very tight time constraints that don´t give you much of a chance to do research. Some properties will have an open house where you can go and inspect the property on your own, but sometimes the property is closed off until after the auction. In this case, you´ll have to take other steps so that you know what to bid.

• Your first step should be the county assessors´ office. They often have records of previous real estate sales and appraisal values of homes located within the county lines. The obvious problem here is that its possible the property hasn´t been sold, inspected or appraised in years, which is going to give you either bad information or no information at all. You can ask for information on the homes nearby, but this will only give you a ballpark figure and not a very accurate one at that.

• Your next stop should be the home computer. Using local and national real estate sites, you can get a semi-reliable estimate of what the asking price would be of the foreclosed property if it were up for sale in the general market. Simply do a zip code or address search and then look at homes that have similar qualities such as square footage, a garage, a pool or whatever amenities the foreclosed property has. You can then take an average of those values and get a pretty good idea of what the actual value of the home would be.

• The last step is the most awkward. You might just have to get out there and do some old fashioned leg work. While it might be very socially uncomfortable, you might have to go knock on some doors of the neighbors who live near and around the foreclosed property and ask questions about it. Maybe some of the neighbors have been inside the property recently and they saw an addition that wasn´t listed in the bank´s description of it. Maybe the neighbors heard the last owners complaining about a cracked foundation or faulty dry wall that could cost thousands to repair. It can be a long shot, especially in this day and age when people can live next to each other for years and hardly speak, but if you´re serious about buying a foreclosed property and you can´t get inside to look at it, talking to the neighbors is your next best option.

Buying a piece of property from a foreclosure auction can be one of the greatest and most profitable investments of your life. But there are no housing Lemon Laws on the books, so it is buyer beware. However, if you do your research and study up on the property, you will most likely come out of it smelling like roses.
GBrey