If the house does not sell pre-foreclosure or short sale, the house will be sold at auction on the courthouse steps. At the court house, their will be an opening price, usually the amount to cover the bank balance and accrued expenses. The house will be bid on by potential buyers until there is a final bid – going once, going twice, sold. In 95% of the cases, the bank is the highest bidder because the auction price is higher than what the other bidders are willing to offer. If an auction bidder is successful in having the highest bid, they are required to pay cash (cashier’s checks) for the property immediately. Successful bidders buy the home “as is,” with no warranty and no title insurance. The reality is that there are few good deals at auctions and the bank usually is the highest bidder. Those lucky enough to get a great deal will have to pay “cash.” Not a very “viable” option for a first time home buyer. So, unless you have a boat load of cash and a lot of time to research the houses offered at auction ahead of time, forget the foreclosure auctions.
SECRET REVEALED: You have to pay cash on the barrel at foreclosure sales.
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