Government Foreclosure Auction: Basic Introduction
Foreclosure often brings confusing thoughts to some people who don’t really understand the process or how it can benefit some people. But the government, and not just banks, can also seize property, farms, ranches, condominiums or mobile homes. For example, if you owe a lot of back taxes or default on a veteran’s assistance loan, the government can foreclose on your property. Though some of this property may be used for programs in the community, most of it is sold through a government foreclosure auction.
How It Works
There are free government foreclosure auction listings widely available. You can use a paid service, but why bother? If you can get online and search for the U.S. Treasury Department’s webpage you will have the listings at your fingertips. Some people may know to go here for foreclosed property, but most do not realize you can also find vehicles, boats, and other smaller forms of valuable property as well.
Changes By State
Participating in a government foreclosure auction is not the same as other auctions where you raise a hand to win and immediately take possession of your new property. Each state has its own set of guidelines as far as when, where, and how you place bids on these properties. In some states, you only need to bring ten percent of your bid with you in order to win, but in others you need to bring the full amount of the property. That is a huge difference in what you could be expected to pay right away.
What About Caveat Empor?
Winning a bid at auction means of course that the item is yours, no changing your mind for any reason whatsoever. Before bidding on a government foreclosure auction, you must find out as much vital information on the property as possible. You will have to find a way to verify the condition of the property in question on your own. You will have to determine if someone is still living there before you go about getting an inspection yourself.
If the home is still occupied and you want to secure the property quicker, you may be able to directly buy it from the homeowners before it is sold at auction. In this way, the government foreclosure auction is stopped. But you have to check with the broker assigned to handle the auction. You will have to consult your state law to know how to proceed with this purchase.
Government foreclosure auctions are not actually handled by government agencies. If they did everything themselves, nothing would ever make it through the process. Brokers and real estate agents within the state of the property are responsible for overseeing the auction and making sure it is done correctly.
