How To Buy a Home at The Foreclosure Auction (2024)

How to buy a home at the foreclosure auction (2024)
Sold to the highest bidder!

What is a foreclosure auction?

Foreclosure auctions or sheriff’s sales as they’re referred to in my area (Lake County IL.) are the sales that are held at the end of the foreclosure process, where the homes are either sold at the auction or taken back by the bank. The sale information is published as a legal notice specific to each property in the local newspaper. Lists of homes being auctioned can also be obtained and also found online (See the link below). The homes are offered in a public auction and sell to the highest bidder above the bank’s opening bid. The bank decides the amount of the opening bid. If nobody bids on the home, it goes back to the bank. 

Auctions in the current market

It had been a few years since I had been to a sheriff’s sale. I ended up going to one recently. There were some things I noticed right away that hadn’t changed. You could tell as the room started filling up, that many of these people knew each other or at least were used to seeing each other every week. I’m sure for some, it’s a full-time job. One thing that was different was the volume of homes being run through the auction. The sales I had been to previously had many, many homes being auctioned. At this sale there were far less. 

Discounted Prices

 It was interesting to see what some homes sell for at auction versus sales on the open market – some pretty deep discounts are evident. There was one small house being auctioned that I was very familiar with and knew it’s value. It was a home which normally would sell for about 130k, conservatively. The bank’s opening bid on this home was $87,000.00 and nobody bid on it. This shows not only the discounts available with these homes but also how much of a discount these buyers expect or require before they’ll bid.  A couple of the homes, I could tell by the addresses, were great buys for the opening bid amount. The opening bid amount is posted the day before the sale.

Competition

There were a few properties that had multiple bidders which drove the price up several thousand dollars above the bank’s opening bid. Clearly some of these homes were much better buys than others. Of the homes available, only some sold. The rest were taken back by the bank and will most likely find their way onto the market in the coming months as a bank owned foreclosure. 

Cash Only

There are definitely opportunities at these sales but it’s not something to just show up at and buy something. These purchases should include plenty of research prior to the sale, including the advice of your attorney, who can search the title so there are no surprises. These sales are cash only. A minimum of 10% of the amount bid (cashier’s check) is required to bid and the balance is due by the next business day. The sales are held every Tuesday morning at 9:00 at the Lake County Sheriff’s office in Waukegan at 25 S MLK Jr. Ave. For a current list of properties scheduled for upcoming sales, click the link below. https://salesweb.civilview.com/Sales/SalesSearch?countyId=58&fbclid=IwAR3gllhjfUZmvTIienMx86G3YPb6ALccY3psSwAqb0tqnY6B1bDCVGXuwPA

For more information about foreclosure sales, feel free to contact me for a no cost consultation https://boblinke.com/contact/

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