How to Buy Foreclosures at the Courthouse Steps
I’m sure you have heard that the best foreclosure deals are found at the county courthouse steps. This may or may not be true, but for sure, you can find great deals at the courthouse steps. Here you will learn how to buy foreclosures at the courthouse steps.
But, what do you need to know? How do you go about it? How does it all work? Can I do this? These are all questions that most of us ask, and want to know about buying homes or other property at the courthouse steps.
Just like any other form of investment, the single most important thing you can do is to educate yourself.
You must take it seriously, or you can easily lose your shirt. However, if you do your research, study, and diligence, it is possible to find real bargains that you can buy and resell, or buy and rent out for a nice profit, or a steady income stream.
Fish in a Smaller Pond If you are a smaller investor with limited funds, you may have to find a county that is not in a large metropolitan area. These bigger counties will often have bidders with deep pockets, that can make it difficult, if not impossible for smaller investors to compete for properties.
This is not to say that it can’t be done, but it could take a lot more time, research, and patience to accomplish. If you look into counties that are a bit further away from major cities, you will find that there are usually fewer bidders, and the price of the properties up for bid are lower.
You Need Cash Courthouse step sales take place at a county courthouse. Most, if not all county courthouses will require cash at the sale. Every county will have specific rules about how deposits, and payments are handled.
Be sure that you know what these specific rules are for your county of bidding, as misinformation could cost you a winning bid. These specific rules are announced by the auctioneer at the sale, prior to the start of bidding.
You should also be able to learn this information from the newspaper that the auction is advertised in, or online at the county website.
This cash payment policy is both good, and bad. It is good in that it will separate out a lot of bidders.It is bad of course, because you have to come up with a good amount of cash ordinarily in order to bid. There can be a variance as to how the cash is accepted for the bid.
Check with the county in which you live, or want to buy, to see what they require. Nowadays, counties have a website that you can access to learn a lot about how sales work in their particular location.
You Need to Educate Yourself It is vital that you know exactly what you are doing before you undertake the courthouse steps bidding process. These sales are posted in the local newspaper, and on the designated website, usually the county government website.
You can also use the website or go to the courthouse, and look in their books, to find out some history about the property, and the owner, or owners.
Keep in mind that any back taxes that are owed, any liens on the property, or any other outstanding debts attached to a given property, will have to be paid by you the bidder, in addition to what you pay for the property itself.
You should also know what the assessed value is of the property that you are interested in. You also should do a comparable search of like homes in the area that have recently sold. If you have a friend or relative that is a real estate agent, they can easily get this comparable search information for you.
You can also go online to any of the popular real estate websites, and often find pictures and information on the homes you are interested in. Some to the most visited are: realtor.com , zillow, and trulia. Keep in mind though that the information and pictures on these real estate websites may not be recent, and as a result, may not be completely accurate as to the physical condition, and amenities currently.
This information will tell you approximately what you can expect to sell your newly acquired foreclosure for in the near future, and will give you a good idea what you can afford to bid on a given property, and still ensure yourself a sufficient profit.
Don’t Jump in with Both Feet It is a good idea to stick your toe in the water, before jumping in with both feet. You should attend the auctions, and learn all you can, before you actually bid.
Each property or properties have a representative from the bank at the sale that can be a good source of information for you. You should get to know these people, as they can help you with the bidding process.
They know what the opening acceptable bid is for their bank’s properties, as well as other nuggets of knowledge that can assist you. While at the auction you can watch, and note what the experienced investors do, which can be invaluable to you.
Seeing what properties actually sell for at the auction based on what their assessed and/or comparable value is, can tell you how accurate the information is, and you can adjust your future bids accordingly, or let you know that there is not enough profit in the deal to even bother with bidding.
You also want to go to the auctions first before you bid, so that you can see how the auctions actually function. You need to find out where to register, what identification you need, what type of numbers or other signage you need, and any other rules and regulations that are required of bidders.
Go and Look at the Properties This may seem like a no brainer, but it’s importance cannot be overstated. You definitely should go and look at the homes/properties that you are interested in.
Foreclosures can be left in less than good shape. Some times the owners that are being foreclosed upon, will try to effect revenge from the bank by leaving their homes in as poor of shape as possible prior to leaving the residence. The only way that you would find this out, would be to physically visit the property.
Because these are foreclosures, even if you aren’t allowed to see the inside of the home, you can usually look in the windows, and walk around the lot, which can reveal many issues.
It is well worth a road trip to the foreclosed home to keep you from bidding too high, or bidding at all on a home that is in bad shape, and would cost a good deal to fix up, and as a result, eating up any profits you could realize from it’s sale.
Some banks may also allow bidders to look at the inside of their properties. This would be the ideal scenario, as you would be able to uncover defects that may not be apparent otherwise.
Learning how to buy foreclosures at the courthouse steps includes getting to know the representatives from the bank. The more accurate information you are armed with before the bidding starts, the better chance you have of steering clear of potential trouble, and only bidding on those homes that can provide you with a good profit.
The properties that are for sale at the courthouse steps are almost always ‘as is’ properties, which means that the owner, or previous owner is not responsible for making any repairs or modifications to the property that may be needed.
The way the home is at the time of sale, is the way that it will be when the winning bidder takes possession. There is seldom if ever any recourse for a courthouse steps foreclosure buyer to take in the event that a home is not what they thought it was. It is of the utmost importance for you to do your due diligence before you attempt to bid on any properties.
The more current, accurate information that you are armed with prior to bidding, the better chance you have of making smart bidding decisions, and ensuring yourself a successful outcome. With some study, diligence, and patience, you can do well with courthouse steps auctions.
Now you know how to buy foreclosures at the courthouse steps, so what are you waiting for?