This might seem like a simple process, but let me tell you, it’s not.

This may come as a shock, but they happen every day of the week, unlike a tax deed sale that happens once a year. Foreclosure auctions happen every day.

How it works. First, you have the house in mind you want to bid on days if not weeks before it goes up for auction. This will give you the time to learn everything you need to know about this property.

What you need to know

You need to know what mortgage you are bedding on. Yeah as you know you can have many. Never ever bid on anything other than the first mortgage. Why? because any mortgage after the first would just fall off. But if you bid and win on the second mortgage the house will still have the first mortgage in place and ready to foreclose on you.

Surplus Money

What the heck is surplus money? Ok so let us say you bid on a second mortgage that was foreclosing and the former homeowner owed 50k and you won the auction for 125k but the first mortgage is still owed 65k. Well, there is the surplus money. You would have to get a hold of the first mortgage bank and let them know that there is surplus money that they will have to ask the county for. At this point, your attorney would be helpful.

Getting in the house before you buy

Everything you read online or otherwise will tell you “DO NOT ENTER” Yeah I say BS to that. Most foreclosures I’ve bought from an auction were damaged big time by the former homeowner or tenant.

Look in those windows or look for a way to get in. And do it fast. But make sure it’s not occupied before doing such a risky move. That would be real bad. Been there done that. Now keep in mind this is all about buying from an auction. Not just a foreclosure from a bank or realtor.

Have your money ready

Just like any other auction, you’ll need to have that cash-out and be ready to spend it. But come on, you’re not going to walk into an auction with tons of cash in hand right?

At the end of the auction, you’ll need a bank check or money orders adding up to or more than either the 10 or 20% deposit. And at that point, they will give you someone like 30 days to close. And this closing will be like any other.

The Bidding

Know this, you’re not alone. There could be 20 other bidders with deep pockets. And very seasoned sharks. Every time you bid you increase the amount. So let them battle it out and just sit back until the bidding starts to slow down. At this point get ready to blast away.

I always wait until the count. You know, “Going once, Going twice” Then I blast my number. And then as I say the clock starts again. “Do I hear” Blah Blah Blah, you get the idea?

Ok, so the going one going twice and SOLD to you happens. Great, now you’ll have to give your deposit and within minutes. This is so if you don’t have that money they will continue with the auction and properly kick you out. Yeah, I’ve seen it. Other than that, it’s a simple process. But only once you close and that deed is recorded do you own the house.

Other bidders don’t even see me coming. I wait like a shark, and then bam game on, let’s get this done with. But always have your cap and stick to it. It’s very easy to overpay when you’re bidding against others. If it goes over your cap, that’s fine, just move away.

I watch people overbid on properties all the time and by big bucks. It’s all about timing. Bad weather will keep some people away.