A foreclosure auction is a legal procedure in which a foreclosed property is sold, in contrast with a conventional sale. Here a referee named by the court is invited to carry out the operation, turning the home in question over to the new owner.
This activity allows the borrower to lend money from the lender, for example: Banks, the government and any other means on the mortgage owned by the borrower. The agreement is signed between the two, clearly stating the payment dates for the borrower to repay the amount. Regarding the violation of the "deed of trust," the lender has sole authority over the borrower's property.
The whole process is much more straightforward than it sounds. All auctions are public, so anyone can go to them without having to get some kind of permission, all you have to do is know which properties are going to be auctioned and when. This information is made public from time to time so look for the home you are interested in and find out the day, time and location of the auction. Once in the auction, you must bid for the house, if your bid is the winner you will be granted the rights over the property after paying the necessary amount.
The Solvency Factor
The first point is essential, you need to demonstrate that you are a solvent citizen, because as we have mentioned before, you are going to pay a "deposit" the day before the bid, in order to participate in the auction. If in the end, it turns out that you are the winner, then you will have to pay the rest of the amount in a traditional way. Otherwise, you will lose the ticket.
Find Out More About the Type of Auction
Another important piece of advice is that you should be well informed about the type of auction that is going to take place, as there are occasions when the property is being auctioned but without the usufruct; in other words: You can become the owner of a property, but it is probable that for the time being you will not be able to live in it because it is occupied by tenants or by others. You should always look for residences that will be auctioned completely.
Judicial Record of the Auctioned Home
Another interesting point that you should consider before deciding to buy at an auction, is that you’ll need to go to court in order to request the file of the property you want to bid. In this document, you need to make sure if there are any legal charges or notifications about the property, an essential point to avoid future problems with the law.
Visit the Property Being Auctioned
We also recommend that, before participating in the auction, you should make a visit to the house that is going to be sold just to check the actual status of the property while making sure that there are no tenants, solely the owner. This step is crucial because if the property is being rented, it can cost you more than eight months to evict it.
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