1. The trustee requires you to pay for your puchase immediately upon winning the auction. You cannot leave the auction, go to a mortgage company and process a loan - it's cash or equivalent only. Bring cashier's checks to pay for your win.
2. The property comes as-is with all its faults - they are your responsibility. Since you won't be able to see inside the property before bidding, you're buying a pig in a poke. Good luck.
3. The property may not be paid off by your purchase. There could be other liens on the property, such as for taxes or other mortgages. Being aware by doing research before bidding is the only safe way.
4. The bank that forecloses will automatically bid the full amount they're owed. So, it's unlikely you'll get a bargain. A short sale before foreclosure would mean the bank receives less than the amount owed - so it's going to be lower priced.
After foreclosure the bank will market the property as a REO (real estate owned by the bank) and will likely be priced at market value. But that's probably below what the auction price was.
Before the auction, as I mentioned, a short sale by the owner will result in a lower price, since it is at or below market and the bank must approve it. You do get a disclosure; unlike after foreclosure.
Talk to a Realtor to get more information.
Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
Multimillion Dollar Sales Producer
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