The Importance Of Cash At a Foreclosure Auction
There’s a first time for everything. For most real estate investors there will be a first visit to a foreclosure auction and a first purchase from the foreclosure auction. Sometimes these two events will happen on the same occasion, but more likely they will not. It is important for investors to get a feel for how the foreclosure auction process works before attempting to make a purchase. Of course, there is one piece of knowledge that most new investors are not aware of the first time they attend a foreclosure auction and even the first time the attempt to make a purchase. Cash is a must-have for the auction.
Some investors may already be aware of this fact, but many will be surprised. Hopefully, this is knowledge that you will be equipped with the first time you attempt to purchase property from a foreclosure auction. It will be extremely unfortunate, not to mention embarrassing, to find out this fact once you have bid on the property.
Before you attend the foreclosure auction you need to find out how just how much cash you need to bring to the auction. You can find this information out from some an official of the auction. The referee, sheriff, attorney, or trustee can give you information about the amount of cash you need to have. You might need to bring only a certain percentage of the winning bid price or the entire winning bid price. This amount will vary from state to state. This is why you must find out prior to the foreclosure auction. If you are unable to find out the amount, you should be prepared with the full amount of the winning bid.
There is a small exception to the cash rule at a foreclosure auction. Perhaps officials realized it was unsafe for people to have such a large amount of cash on hand. Nevertheless, cashier’s checks are accepted as well. You can make the check out to yourself and then sign it over to the trustee once you place the winning bid.
Even if you use a cashier’s check rather than carrying cash, there is still the need to have the money available as if it were cash. In the instance that you only pay a percentage of the winning bid price, it is imperative that you have the means to come up with the remainder of the price so you don’t lose your down payment. It is in your best interest to be pre-qualified for a loan because you only have thirty days after the foreclosure auction to pay the remainder of the winning bid price.
Unless you have become extremely familiar with the foreclosure auction process, you might not have been aware that cash is needed to pay the winning bid price. Having this knowledge will save you a lot of trouble at your first auction. To make sure you are prepared to purchase a property from a foreclosure auction you should have cash or a cashier’s check handy.
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