Phil Pustejovsky of FreedomMentor.com delivers foreclosure auction tips in this video that will save you time and money & protect you from getting burned. And, because foreclosure auctions are immediate cash sales, they have a lot of potential pitfalls for unwary investors.
Watch this video to gain a better understanding the “buyer beware” foreclosure auctions environment.
Foreclosure Auction Tips – Phil Pustejovsky
- Do your property homework.
- Check the property value and determine the ARV.
- Check out the condition of the house in person.
- Find out the opening bid amount.
- Do a title search.
- Look up the property records.
- Check for other liens on the property.
- Rules of the game
- Does the County allow the homeowner to dispute the auction sale?
- Does the County allow the homeowner the right of redemption?
- Look up the foreclosure case records and read the files.
While the opening bid amount is a critical number it can sometimes be hard to determine. There are two different types of foreclosure auctions: judicial and non-judicial.
A non-judicial foreclosure auction will show you the opening bid amount. A judicial foreclosure auction notice might not show you the judgement amount. The judgement amount is how much the mortgage company is owed in back payments, taxes, insurance, and legal fees.
And, while the advertising notice for a judicial foreclosure auction may say that the opening bid amount is $100, it is actually going to be the judgement amount, which is determined in the last hearing before the foreclosure auction takes place
One great foreclosure auction tip from Phil is to look for judicial auctions where the property value is much higher than the amount owed to the lender. He also recommends avoiding foreclosure auctions where there is too little property value compared to what is owed to the lender.
Foreclosure Auction Tips – The Auction Process
- Foreclosure auctions can be in person or online.
- Be aware of any buyer’s premium and/or fees in online auctions.
- Determine your max bid amount ahead of the auction.
- It’s OK to lose the auction if it goes above your max bid.
- It’s OK if the property you researched doesn’t even go to auction.
- Get insurance on the property immediately (within the hour).