To purchase in the first two types of auctions there is most likely a private reserve, which means the seller has a secret price that you wonâ€™t sell under. Financing is generally allowed and often available on site at the auction. Tile is transferred unencumbered and escrow is used.
From you r question is appears to me that you are more interested in the type of auction on the court house steps. This is a very different process. When you bid at the courthouse steps you must have cash in hand at the end of the auction, this is normally in the form of cashiers checks. You buy as is and where is. You take possession of the house INCLUDING any tenants or occupant, leases, tax and support liens that often go with the property and you inherit any maintenance problems with the property. This is a high risk business dominated by professional investors that have the time and money to balance out the losses with the gains and have the resources to research the properties before the auction in regards to title issues and occupants. One of most important warnings I would pass on is to make sure you buy a first deed NOT a lien for a second mortgage.
The best way for an "ordinary" person to buy a foreclosure is through a Real Estate agent. That way you get clear title and a vacant property. I provide a free list here - http://www.craigbosse.com/concord-ca-foreclosure-list-bank-o .
I have written an article that explains it step by step here - http://www.craigbosse.com/how-to-buy-bank-owned-foreclosure-
Also, don't be fooled by some super low priced homes you may see marked as "pre-foreclosure". For example a $300,000 home priced at $125,000. These are just teasers to try to get you to buy a subscription. The homes are not actually for sale.
We have tons of videos about buying bank owned homes here - http://www.craigbosse.com/category/buyers/
Foreclosures are sold on the MLS and that it eh safest way to buy one.
You must pay the full price on the spot.
If the home is occupied it is up to YOU to evict them. If it is occupied buy a tenant with a signed lease YOU MAY BE FORCED TO HONOR THE LEASE. This is thanks to new laws to protect tenants of homes that are foreclosed on.
You get no inspection on a house you have not even been inside of.
You are on the hoop for any and all back taxes.
You better know you are buying a first lean and not a second. If you buy a second and the first forecloses you are out 100% of what you paid.
Most of the sales on the courthouse in this area don't have any bidders and the lender ends up buying / taking it back.
Your safest bet is to let the property foreclose and come back on the market. Then you can have a local Realtor show it to you. If you like it put in an offer with an inspection contingency. Then if you find serious unexpected problems you can back out of the deal and not get stuck with a bad house. If the inspection is ok and you buy it you will get clear title. The seller / bank pays all back taxes.
I would suggest you be patient, work with a realtor and forget about auctions, focus on the foreclosures and short sales or other distressed listings for future opportunities. It is hardest to flip properties, better to buy and hold as a rental.
Best bet is for a buyer to work with a good real estate agent and focus on homes that have been taken back by the bank, having failed to sell at auction. Then you have none of the above problems.
Bernard Gibbons, J. Rockcliff Realtors
DRE License # 01331583
Phone (925) 997-1585 - email@example.com