It is likely that when you hear about government foreclosure you think of the police storming in and taking over someone’s home. We are all well aware that not paying our mortgage will lead to a bank foreclosure, but few understand that the government can take over everything from home to boats and cars. The U.S. government does have the right to seize property if for instance you don’t pay your taxes or have fallen behind on a veteran’s assistance loan. Sometimes, the government decides to use the property for social programs, but mostly they just sell in a government foreclosure auction.
The Process
There are free government foreclosure auction listings widely available. Some people choose to subscribe to paid services, but there is no need to do that. It is as simple as getting online and searching for the U.S. Treasury Department’s webpage and finding their listings. There are many listings beyond homes here as well, including vehicles, boats, office equipment and even rare items like books.
Learn Your State Guidelines
Participating in a government foreclosure auction is not the same as other auctions where you raise a hand to win and immediately take possession of your new property. The procedures of how and when you place a bid will depend which state you live in. In some states, you only need to bring ten percent of your bid with you in order to win, but in others you need to bring the full amount of the property. That is a huge difference in what you could be expected to pay right away.
Caveat Empor
One of the disadvantages of any kind of real estate auction is that once it’s yours, you can’t back out of the deal. Just as with buying a home through any other means, you need to find out as much information about a property up for government foreclosure auction as possible before you bid. It is your own responsibility to check that the property is in good enough condition to make a good purchase. This can be difficult if there are people still living on the property.
If the home is still occupied and you want to secure the property quicker, you may be able to directly buy it from the homeowners before it is sold at auction. When you make such a deal it will stop the property from going forward to government foreclosure auction. First, you must figure out which broker is responsible for the auction of that property and notify them of your intentions. You will have to consult your state law to know how to proceed with this purchase.
The government doesn’t actually handle government foreclosure auctions by themselves. It is a common joke that if they did nothing would ever get sold! Brokers and real estate agents within the state of the property are responsible for overseeing the auction and making sure it is done correctly.
