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Auctions & Foreclosures  Auction and foreclosure properties entice home buyers who want to find a bargain. Some bank-owned listings, estate sales, relocation and vacant properties are referred to as 'distressed properties' which references the financial situation of the property's owners rather than the actual condition of the property itself. Some properties do suffer though when the owners cannot make needed repairs and do proper maintenance. Most bank-owned properties currently are listed with real estate firms who can market them fairly easily in the current seller's market. Buying bank-owner and auction properties is not for the easily-discouraged person. Obtaining information about the properties and negotiating for purchase is generally a complex and time-consuming process. HUD (Housing and Urban Development) homes are advertised on a regular basis and offers must be put in to HUD through HUD-registered brokers. You can see their listings and many links for many others, including VA, FDIC, Freddie Mac, etc. at www.hud.gov/homesale.html.Massachusetts home buyers can also find out what foreclosed properties are being offered by the Massachusetts Housing Finance Agency by going to their web site page for REO (real estate owned) at www.mhfa.com/sf/sf_reolisting.htm
Tips for buying at auction include:
- Research the market before making a bid. Get hard numbers on comparable sales.
- Find out if there are minimum selling prices ("seller's published reserve") or if there are none ("absolute").
- If home is not finished bid on what house is worth unfinished or pass on it altogether.
- Try to determine reliability of information from auctioneer since auction is not regulated by state.
- Remember that your purchase will hurt any appraisal needed to refinance the property after your purchase.
- Pre-register for an auction to allow for a credit check to be done.
- Plan on bringing a cashier's check for at least 5% to auction which may be at risk if you back out of the purchase.
- Find out if you can be considered a back-up buyer if the successful bidder backs out of the purchase.
- Attend auctions where the number of people is low - experts recommend a ratio of 5 people or less to get a bargain.
- Write down your top bid and keep it in your pocket to avoid getting caught up in the high pressure, auction atmosphere.
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