A foreclosure is a legal proceeding in which a bank or lender sells or repossesses a property due
to the owner's inability to comply with the mortgage or deed of trust payment
schedule. Banks and other lenders usually consider a mortgage to be in
default when payments have not been made for several months. Now
despite being a dreaded word, a foreclosure can actually be extremely lucrative
for those looking to invest in distressed real estate. Now that you have
an idea of what a foreclosure is, I will go on explain the portion of the
foreclosure process known as the foreclosure auction.

Often the owner will try to sell his/her property before the foreclosure
auction. However, if the owner is unable to sell the property before the
auction takes place, the trustee will auction the house off to the highest
bidder. At this time, the bank/lender often pays any outstanding debts
such as property taxes or amounts owed to the IRS in order to sell the house
with a clear title.

Buying property from a foreclosure auction is an experience unlike any other in purchasing real estate. Although it can sometimes seem to be a risky venture, it can often also very lucrative. So I
recommend that, while you try to participate in foreclosure auctions, first-time
investors tread carefully. This is because many times a potential buyer
might not even be allowed to inspect the property prior to the auction and in
addition will likely have to find nontraditional financing to come up with the
entire purchase price in cash over a short period of time. Although this is very
rare, buying at a foreclosure auction sometimes also comes with at least the
theoretical the possibility that the former owner will exercise his/her right
of redemption by coming up with the cash to buy the house back within a
certain allocated period of time after the foreclosure sale. (Although many
jurisdictions do not have right of redemption provisions.) Another
warning is that IRS also has 120 days to redeem the property if back taxes are
owed. But this rarely happens, and if back taxes are indeed owned, and the bank
has not taken care of this prior to auction, you can always calculate it and
figure it into your bidding price. The bottom line is that is you should be
aware of what I?ve mentioned above, but these same characteristics of a
foreclosure auction are what keep many reserved or timid bidders away, and
therefore allow you to bid on the property with less completion.

If you decide to attend this type of auction you're probably curious as to where
they're held. Foreclosure auctions are typically held at the property's
local courthouse or at the property itself (although this is rare.) If
you've never been to an auction, when a property goes up for foreclosure
auction, the competition can initially seem even be intimidating. Don't let this
discourage you because purchasing real estate this way is ultimately very
lucrative, and that's why investors and others do it. If you're
interested in attending a foreclosure auction I recommend you consider the
following:

Research the condition of the foreclosed property and any existing debts such as liens, unpaid taxes and previous construction debts

Scope out land use problems such as zoning or toxic waste issues

Find out the auction rules and how the auction process works

Sit in (without bidding) on some foreclosure or other auctions ahead of time

Do all the calculations, decide what your maximum offer will be, and make sure not to go above it

Arrange for any financing you may need ahead of time with short term lender with a view towards flipping or refinancing later.

If you or someone you know
if looking to attend a foreclosure auction there are many websites out there
that specialize in providing that information. One such website that
really stuck out from all the others was GovernmentAuctions.org. We
were blown away by just how foreclosure auction information they had within
their online database, and how up to date it was. The great thing about their
website is that you can browse auction listings from all 50 states and find the
auctions closest to you.

For the most comprehensiveforeclosure auction website on the net, GovernmentAuctions.org is definitely a site everyone should check out.

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