Sunday, February 08, 2009

Home Foreclosure Auction: How To Prepare

Home foreclosure is a very devastating experience. However, for some people who need to buy a home at a much lower rate, home foreclosure auctions could be one of the most favorable choices. Many buyers of foreclosed houses feel guilty. What they don't understand is that it was not their fault that the house is being foreclosed nor was it their fault to want a house for themselves. If you are one of them just remember one thing. If you don't buy that foreclosed home, somebody else will. If someone has to buy it, it might as well be you.

But there are some preparations needed to ensure that you get the best deal.

One, realize that foreclosed homes don't come out clean. The fact that the home was foreclosed only means that the owners failed to meet the regular payments and liens, if there are any. So be sure that the home being auctioned has clean papers. Here's the catch though- most foreclosed homes are auctioned as-is. So any mess or damages done by the previous owners will be your problem once you own the house. So as much as possible research on the particular house that interests you.

Two, don't hop into the auction right away. If you are serious about getting a house through auction try to practice first. Go to an auction but don't participate. This way you'll get the feel of being in the auction pit and it will help you when you actually participate in the bidding.

Three, never get carried away by the bidding wars. Some foreclosed homes increase in value because of exaggerated bidding wars. If there are several people who really want the house and the price has exceeded your budget then do yourself a favor, just back out form the bidding. Emotions can be very dangerous especially during auctions.

Last, do not expect too much. You may or you may not get the house being auctioned. Despite the preparations and research you have done prior to the auction, there might be someone else who may outbid you. If you want to give your efforts some justice and you resort to outbidding everyone else beyond your own capacity, you might find that the auctioned house you won might be a nightmare not a reward. Remember to pull your stops when necessary. If you don't get this house, then think about getting another in the future.


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