According to most financial experts, buying foreclosed property in auctions is the most common and lucrative way of being successful in the real estate industry. However, if you do not know the correct method of purchasing a foreclosed property, it could result to the loss of your money. Over-bidding on properties having no proper assessment of real market value as well as relevant fix up costs is often reason why most people fail in foreclosed properties auctions.
Public auctions for foreclosed properties are held under the governance of the state or county court where the properties are located. If you are a buyer, you have a great advantage in buying foreclosed property in such auctions since the title is transferred immediately after winning the bid. Consequently, the biggest advantage in buying foreclosed property in auctions is the opportunity for profitability. The difference between the estimated price and value you can sell the foreclosed property and the highly discounted price is huge. As such, you are most likely to profit from the property. Prior to the actual auction, interested buyers are given a six-week notice to inspect the properties for auction and assess the total costs, which include liens, fix ups, and other factors. Thus, you have the time to research the market value of the foreclosed property you are interested in at which you can profit from.
On the other hand, buying foreclosed property in auctions also has disadvantages. One of the major disadvantages is the required investment capital. You are only given a short period to pay for the foreclosed property, which you have won through bidding from the auction. Thus, you need to prepare for a huge amount of capital before the foreclosed property can totally be yours. To avoid major losses, you should research thoroughly about the process of buying and selling of the foreclosed property.
If you really want to start buying foreclosed property then I would highly suggest that you go to a few auctions and start seeing how the process works before you start bidding. This will help you decide which properties sell better and for how much they usually sell for.