What happens when a home goes to auction?

At the auction, the home is sold to the highest bidder for cash payment. Because the pool of buyers who can afford to pay cash on the spot for a house is limited, many lenders make an agreement with the borrower (called a deed in lieu of foreclosure) to take the property back. Or, the bank buys it back at the auction.

Where does the foreclosure auction take place at the courthouse?

The Courthouse Steps The auctions take place at the county courthouse of the county in which the foreclosed property is located. It occurs on specified days of each month. Auctions aren’t always well-attended, and you could find yourself as the only one there.

What are the different types of courthouse auctions?

Can a first time home buyer bid before the auction?

This will cover the lender’s exposure in the property or at least minimize it if the property is likely to sell below the outstanding loan amount. State law may provide for bidding to begin in advance of the auction to give first-time homebuyers a chance to bid on the property. If their offer is accepted by the lender, the auction will be canceled.

Can you buy a house on the courthouse steps?

An old-fashioned term for the process of buying a property in foreclosure, buying a house on the courthouse steps is a way to get a real deal on a house – or to get into real trouble. Foreclosure is actually a multi-step process that begins with “pre-foreclosure.” That’s the period of time after the mortgage /deed of trust first goes into default.

What happens when a house is put up for auction?

If the homeowner does not pay the balance owed—or renegotiate the mortgage with the lender—the lender can put the home up for auction and force the homeowner out for nonpayment. These foreclosure auctions are held by bank-hired trustees. Another way a home ends up on the auction block is when the owner does not pay the assessed property taxes.

How are courthouse foreclosure auctions supposed to work?

Courthouse auctions may fall into two categories: absolute and lender confirmation. In an absolute auction, the winning bidder gets the property. In a lender confirmation auction, the lender has the right to approve the bid. Lender confirmation auctions have a reserve amount, which is a minimum bid needed to complete the transaction.