How do Foreclosure Auctions Work? How to Find Properties, Research, and Bid
How do foreclosure auctions work? The key is to know where to look and to understand the dynamics of the foreclosure process. Here’s a guide for buyers.
Want to buy a house? With a foreclosure auction, homeownership might be just a few clicks (or hand raises) away.
These auctions bring the opportunity to buy properties quickly at potentially low prices. While investors are known to attend and bid at foreclosure auctions, you can do it, too.
The key is to know where to look and understand the dynamics of the process.
But how do foreclosure auctions work?
Teaming up with an experienced agent on foreclosure properties and auctions, we’ll answer this question and more — to prepare you for what to expect at a foreclosure auction.
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What is a foreclosure auction?
John Durham is a successful real estate agent in McDonough, Georgia, and has purchased homes at auction for the majority of his career as a real estate agent.
“I’ve been in business for 24 years, and [auctions] have always been extremely popular,” says Durham.
The purpose of the foreclosure auction is to recoup money for missed mortgage payments or tax liens. To help collect this money, the home is listed at a foreclosure auction where it’s bid on and (ideally) won.
Are there risks associated with buying a house at auction?
Buying a home at a foreclosure auction comes with potential pitfalls, including hidden liens, unpaid property taxes, structural damage, and eviction issues with previous occupants. Unlike traditional home purchases, auction properties are typically sold as-is, meaning buyers don’t get the chance to inspect the home beforehand. Understanding these risks can help you make informed decisions and avoid costly surprises.
Where can you find foreclosure auctions?
Before bidding at a foreclosure auction, thorough research is essential to avoid financial or legal headaches. Buyers should check public records for outstanding liens, conduct a title search to confirm ownership history, and visit the property (if possible) to assess its condition. Consulting a real estate attorney or working with an experienced agent can also help uncover any red flags before committing to a purchase.
With the popularity of foreclosure auctions, you can find them in numerous places. Foreclosures are put up for auction both online and at live, in-person auction events.
Local newspapers can list upcoming foreclosures.
“In small towns, they have their own newspaper. That’s where people would put legal things like foreclosures.”
Durham says that in Georgia, foreclosures must be advertised for four weeks leading up to the sale. “If they miss one [advertisement], they have to start over the next month,” explains Durham.
You can also find foreclosure auctions on websites such as foreclosure.com or city and county public records. An experienced real estate agent can also help you find upcoming foreclosure auctions.
