When a home goes up for auction, there’s usually at least one financial claim on the house, usually by the lender who’s been trying to collect on the home loan.Īn auction price will depend partly on what the owner still owed on the previous owner’s mortgage. The next thing to consider in terms of an auction price is the financial situation behind the foreclosure. You’ll get even more insight with an experienced real estate agent, who can be an asset in understanding home sales, pricing, and appraisals of the specific home or homes you’re evaluating. Using the Homelight Home Value Estimator can help. Knowing the ins and outs of the market you’re hoping to buy in will help you estimate a potential auction price. 70 on the dollar,’ and then there are other neighborhoods that they just flat-out want to get off their books.” They are going to say, ‘Okay, we’re willing to take. “It’s very difficult to gauge, because there’s some neighborhoods that, even if it goes to auction, the bank is going to have a stop-loss price based on the comps in that neighborhood. He gives a little insight to the bank’s perspective in these situations: Michael Constantine, a top agent in the Pasco County, Florida, area, has extensive experience with foreclosures as a real estate agent and has also worked for major financial institutions. Therefore, your offer will need to take that into consideration if you’re bidding to win. (But, as we’ll discuss below, the home’s current condition might set it apart from other comparable homes in the area, dragging its value down until it’s been renovated or repaired.)Īlso remember that, although you may be hoping for a discount, the bank is trying to recoup as much of the appraised value as possible. These comparable homes - comps - can give you a good idea of what similar homes in the area might be worth. An appraiser will compare the home to others around it, taking into account recent sales prices for other homes with similar features. They’ll then use that value as a starting point when conducting the auction.Īn appraisal typically takes into account a home’s size, condition, features, and property. The lender that’s trying to collect on the defaulted mortgage will order an appraisal on the home to determine its worth.
Buying foreclosed home at auction forum professional#
One important factor in how much a house will go for at a foreclosure auction is its appraised value - the professional estimate of its worth in the current market. Source: (bongkarn thanyakij / Pexels) How much do foreclosed homes sell for at auction? Appraised value
To help you calculate how much a foreclosed home might sell for at auction, we talked to expert real estate agents with years of experience in the field of foreclosures. You definitely don’t want to overpay, especially considering you might need to pour a lot of money into repairs and other problems once the home is yours. You very likely can shave some cost off the final price when you buy a home at auction, but just how much that home will cost - or what level of discount you can score - will depend on a number of factors. But is it true that you’ll pay much less if you buy a foreclosed house at auction? And if so, how much of a discount can you expect? How much do foreclosed homes sell for at an auction? If you’re buying a house with cash, it makes sense to try to get as good a deal as you can - and that’s where auctions come in.
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