Government Foreclosure Auction: What Is It?

Posted by allanmadams on January 19th, 2010 at 08:52pm

Foreclosure often brings confusing thoughts to some people who don’t really understand the process or how it can benefit some people. But the government, and not just banks, can also seize property, farms, ranches, condominiums or mobile homes. The US government can seize property from anyone who owes them a lot of taxes or who defaulted on a VA home loan.  Usually the property will be sold at a government foreclosure auction, but there are times it may be handed over for social programs instead.

The Process

Finding government foreclosure auction listings for free is rather easy these days. There is no point in paying for this service, since you can hunt it down on your own for nothing. All you need to do is check out the US government’s web page at the US Department of the Treasury. You won’t just find homes and farms listed, but often will find cars, boats, office equipment and sometimes rare books.

Learn Your State Guidelines

You are likely familiar with the normal auction procedures where you make a bid and take your won property home immediately, but a government foreclosure auctions are different. The actual particulars of when and where you present your bid differ from state to state. While in one state you may need to bring a small percentage of your bid amount to win a home, while in another state it is required you bring the full amount in order to win the home. That is a big difference so you must know your state’s guidelines before participating.

Understanding Caveat Empor

As with any auction, there is no backing out of the deal once you are the winning bidder. You need to know as much information about that property up for a government foreclosure auction as possible before you decide on a bid. You are responsible for checking on the property’s condition yourself.  Since some properties may still be occupied, it can be difficult to inspect the property.

If you really have your heart set on the property, you may be able to work out a deal to buy the home from the people still living in the house. In this way, the government foreclosure auction is stopped. You must first contact whatever broker is handling the auction in question. This is an issue over which your state law will decide how you proceed.

U.S. government agencies do not actually directly oversee a government foreclosure auction. This is a good thing, since things might never get sold if it were just up to the government to do something. In order to get things done, what the government does is hire local brokers and real estate agencies to handle the whole thing.

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