Foreclosure homes auctions are not the traditional way to purchase homes. But even if the buyer is not familiar with foreclosure homes auctions, the process is fairly easy to understand.



Real Estate Disposition Corp. (REDC) chief legal officer Joe Joffrion said that foreclosure homes auctions are alternative marketing methods to sell residential units owned by banks and mortgage lenders.

These residential units range from condominiums, multi-family dwellings and single-family homes that have undergone the process of foreclosures. According to Joffrion, foreclosure homes auctions help builders, mortgage holders and banks dispose of their surplus inventory, while helping potential homebuyers find properties of great value.

Before attending an auction, homebuyers must do some research about the foreclosed properties that they plan to bid on. Coordinate with town halls to check the property's location to ensure that it has no current code violations. Homebuyers should also make certain that the house is under clean title.

Prospective homebuyers are also advised to attend open houses before the auction day and bring with them a professional home inspector.

The following are some steps that potential homebuyers should know when purchasing distressed properties at auctions:

?Register with organizations such as REDC either during the auction day or online.

?Actual bidding on foreclosed homes.

?If bidding is successful, the buyer should choose from various financing schemes offered by auction houses. Most auction houses offer low interest rates and loans that have no prepayment penalties.

?The final step of the auction process is establishing an escrow. Successful bidders are required to endorse their cashier's checks to closing agents and provide cash or personal checks to cover any difference in the amount needed to acquire the property.

It is advisable that prospective homebuyers carry with them a cashier's checks amounting to a portion of the market price of the property that they are going to bid on. The remaining balance for the acquired property is usually payable within weeks upon paying of the cashier's checks.

On its part, REDC requires homebuyers to provide cash or personal checks amounting to 5 percent of the property's total sale price.

All sales made at auctions are final and so it is a must that homebuyers find out everything they can about the property to avoid making decisions that they would later regret.