Auction Properties For Sale: How Does It All Work?

Posted by jason michalak on September 5th, 2016

While mentioning the ways to auction property, we often forget the rest of the things that are involved in the process of auction, some of which have been explained below.

 

  1. The foremost question that naturally strikes us when we talk about auction propertiesis, how those properties end up with an auction house. Well, there could be several elements at play. For instance:

  1. Repeated failure in mortgage payments.

  2. Loan issues and other pending payments.

  3. Tax defaults.

 

Under any or all of the above mentioned scenarios, the homeowners are very likely to receive warnings and legal notices until either problems are sorted out or the house is seized. Apart from that, properties that are not claimed by an owner over a prolonged number of years may also be taken over by the legal system.

2. Once we are clear about the reason the property is up for auction, we can move on to a better understanding of the entire auction process, which is usually divided into two categories.

  1. Lender confirmation auction:
    Here, the sales choice is highly flexible and the lender may or may not choose to sell the property to the highest bidder.

  2. Absolute auction:
    This is the most commonly understood kind of auction where the highest bidder automatically grabs the sale.

 

There are several other things at play before an actual auction begins. Potential bidders are advised to go through county recorder websites to learn more about the property especially the property’s history. For those looking for a broad range of properties for auction, online auction platforms like fre.com are a very good source as they allow the bidders to be aware of all the options that are available out there.

 

The process includes announcing the minimum bid which is usually based on the remaining mortgage balance and then opening up the property for bidding. Winners are required to pay a buyer’s premium and make an earnest money deposit before they place their bid.

 

The final sale price is usually lower than the actual value of the property but in case there are profits, they either go to the owners or are utilized in clearing any legal issues surrounding the property

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jason michalak

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jason michalak
Joined: April 6th, 2016
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