Where To Find Upcoming Real Estate Auctions
I am a fan of Jon Cryer’s Lex Luthor on the CW’s Supergirl. Yes, the show is campy and corny, but I enjoy it. Cryer’s Luthor exudes a campy, evil capitalist bent that is entertaining to watch but also perversely mirrors the real world of finance. In one episode, Luthor admonished another character for not understanding or appreciating how money in a capitalist system is created. “Money is always acquired at someone else’s expense!” Luthor sternly said. Let’s break that statement down.
If you don’t spend money as a consumer, local businesses close and people lose work. If you got a job, then that means someone else who really needed that job didn’t. Businesses would rather throw perishable food in dumpsters and pay security guards to guard the dumpster against hungry people until it is taken away, instead of losing money to free charity.
The point is that if you understand the market for specific transactions then you can buy something at a good discount. However, your good financial fortune may come at someone else expense. The best way to explain this is to talk about upcoming real estate auctions.
I am not trying to make you feel bad. But the truth is that money really is acquired at the expense of others. When you buy a home at an auction, it’s because someone had their home foreclosed on by a bank.
Upcoming Real Estate Auctions (A Primer)
Almost 33,700 homes went into foreclosure proceedings in the first three months of this year. And those are the new foreclosure filings. There may be a backlog of over one million homes in foreclosure in the United States waiting for financial action.
The price that you pay at an upcoming real estate auction depends on the earnestness of competing bidders. However, a winning real estate auction bid could be less than 50% market value. Or up to 50% less than the original value of the home.
The typical price of a new home is about $372,000.
So, before we discuss where to find upcoming real estate auctions, let’s discuss the process.
What is a Real Estate Auction?
A home falls into foreclosure after 90 days or 120 days of lapsed mortgage payments, depending on the state. Sometimes a home will be foreclosed because the homeowner stopped paying taxes.
When a home is foreclosed upon, it becomes the property of a bank, realtor, or investor. The property is then listed for public auction so the bank can recoup as much value as they can from the home.
Upcoming real estate auctions are usually held in courthouses, government buildings, large-scale conference centers, and other similar locales. Some real estate auctions are online-only.
Real estate auctions are open to the public to attract as many potential bidders as possible. You will have to pre-register to attend and pay a variety of bureaucratic fees.
For example, you may pay a 10% auction fee. The auctioneers may take a percent for all winning bids. Some auctions require you to pay a 5% or 10% deposit, against the value of the property, before you bid. (It’s refundable if your bid loses).
And there is no financing in real estate auctions. You will have to pay on the spot by cash, check, or bank account withdrawal. Make sure that you email or call ahead and learn the bidding processes for participating in a real estate auction.
Now, here are a few places where you can learn about upcoming real estate auctions.
The local online edition of your local newspaper will always have legal listing notices of the latest properties to go into foreclosure and accompanying auctions. Note the names of the auction company and check them out online.
Real Estate Listing Websites
Real estate sites like Zillow feature upcoming real estate auctions relative to where you live. Compare what you find on the most popular sites.
Local, State, and Federal Websites
The U.S. Treasury has a listing for upcoming real estate auctions on this website.
USA.Gov has a website listing upcoming real estate auctions for government seized properties.
These listings may not be updated regularly, so check periodically.
Auction.com is an online auction site featuring over 16,000 foreclosed properties up for auction in all 50 states.
Real Estate Broker
You can get a lead on upcoming real estate auctions by asking a local real estate broker.
Now, let’s talk about some of the drawbacks of attending upcoming real estate auctions.
There is an unspoken etiquette and system for bidders at auctions. Some bidders wear sunglasses or maintain neutral expressions throughout the bidding process.
If auctioneers see how excited and enthusiastic you are to bid, they have no incentive to end bidding soon. Bidding could be drawn out as long as possible based on bad poker faces or uncontrolled mannerisms of excitement exhibited by bidders.
You may not be able to inspect the property before buying it. The property could be in a state of traumatic disrepair and full of pests. You may end up spending a fortune just to repair and renovate it.
Take it upon yourself to check if there are tax liens or former owners claiming to own the property.
Remember how I spoke about money being earned at someone else’s expense? The original owner may get enough money to buy back the house and take it from you.
The right of redemption law exists in almost half of the United States. This means that if the original homeowner pays the foreclosure price, all bank, and government debts, and other various fees, they can reclaim their foreclosed home.
Even after you buy the house at auction.
While the right of redemption does not happen often, it is possible.
Upcoming Real Estate Auctions – Consult a Lawyer
Consult a lawyer or financial advisor about your intent to buy a home at auction. Public auctions are open to the public, so visit a view to learn how to conduct yourself in the future.
Money, and financial gain, are always acquired at someone else’s expense. Just know what you are doing before you buy someone’s foreclosed home so you don’t end up spending good money to clean up an unforeseen bad deal.
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.