Seized Real Estate

Seized Real Estate

An increasing amount of properties end up at auctions that are organized by banks, state and federal governments due to various reasons, including the ongoing sub-prime crisis that has resulted in many borrowers defaulting on their mortgage payments. You too can be an owner of a seized real estate by bidding at such auctions.

Lenders including banks might already face a loss, while seizing back a property from the borrower. The bigger problem that the bank might face, once it has physical possession of that property is to maintain it, until it can be sold off at a decent rate. Since that could take a long time, banks prefer to auction the property as soon as possible to the highest bidder. You can take advantage of such a situation to pick up a property at a very low price as compared to its market value. You can find various agencies announcing their auction dates in newspapers and even on the Internet.

It is important to first study the procedure that needs to be followed, when bidding at an auction. A real estate broker with extensive knowledge could help you out. You will also need to physically visit the property, in order to assess its condition and also to check the surrounding neighborhood. You will also need to correctly analyze the going rate of a similar seized property in that neighborhood, in order to calculate and make your bid during the auction. You will need to shortlist a few properties, since there will also be other bidders present in the auction that might bid higher than you and snatch away the property from your clutches. 

If you want to just flip the property immediately after buying it, then you will need to make very precise calculations regarding the actual rate that you could bid during the auction. Do not get emotionally charged during the auction, since that will cloud your reasoning process and you could end up with a property that might be worth far less than your purchase price. Learn to let go off any deal that seems to slowly slip out of your reach. You could also rehab the property after buying it, in order to increase its appeal and its value.

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There are also various Websites that offer visitors a wide selection of properties that can be viewed along with a brief explanation. You can therefore search for your property based on location, size, etc. The auction dates are also mentioned in these sites. You could check out the photos of various properties during your online search, but make sure that you carry out a physical survey of the short listed properties, before proceeding to the auction. If you are totally new to the auctioning process, then you should attend a few auctions and just observe the people and the entire auction process without bidding. This will give you an insight as to how the auction process is conducted.  

It would be a good idea to develop a strong network involving agents, brokers, lenders and buyers, if you need to buy properties through this method, since you can then quickly flip your property, once you have bought it. You will also need the services of an experienced real estate attorney, in order to confirm and maintain the legality of each deal.

Buying seized real estate through auctions is a good way of buying properties at attractive rates. This method, if perfected can offer an endless supply of properties that can be flipped, rehabbed or rented out to a good profit.

Written by: SP
Date Written: 07/14/08 
Reviewer Assigned by: David
Reviewed by: GD
Quality Control: AG
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Quality Control Completed on: 22/07/2008