In some cases, they may have even intentionally done damage when they knew they were losing the home. If the homeowners skipped their mortgage payments and/or property taxes, they probably neglected basic maintenance expenses as well. Remember why these homes were foreclosed on in the first place. So if you win the bid, you’re stuck with the property regardless of its condition. In many cases, house auctioneers won’t allow you to inspect a home before you bid on it. House Auction Risks: What You Need to Know But before going through with a home auction, make sure you consult your fiduciary financial advisor, as there are risks involved.
In an absolute auction, the highest bidder wins the property. In a confirmation auction, the lender has the choice to accept or not accept the winning bid (in other words, it could decline the sale if the bid is too low). These are held by governmental authorities.Įach of these can break down into two other types of auctions. So local tax authorities take control of the property and place it in a tax lien auction. In other cases, a homeowner can fail to pay property taxes for many years. It isn’t allowed to get more or profit from the auction. The lender hopes to recoup what is still owed on the mortgage, but often gets less. It then places the home in a foreclosure auction, which is held by bank-hired trustees.
When a homeowner misses several months of mortgage payments, the bank or other lender can place the property under foreclosure and move to get the tenants evicted.
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