Bank Owned REO
Buying homes at the court house auctions appeal to a lot of cash investors since they are buying properties at a discount in some markets. But just like anything other risky ventures, the gain in price point for your property purchase could come with some serious headaches if you are not a seasoned and experience bidder at the auction!
In fact, just because you were the highest bidder at the public auction that does NOT mean immediate possession. If the previous owners are still living in the property you will need to give them ample notice to vacate the property.
But after winning at the court house auction, you need to establish ownership by recording your documents the County Clerk’s Recorder office. Some states that have redemption periods, the previous homeowner will have the right to buy back the property providing he pays the full amount of the winning bid. The Redemption periods range from 1 months to 1 year and could be a reason for the previous owner from refusing to vacate the property.
So before bidding on the property research the home’s occupancy to see if the home is still occupied by the previous owners. Some lenders offer Cash For Keys which is an agreement with the foreclosed homeowner to exchange the key to the property in exchange for a cash payment that they can use to cover their relocation expenses.
Finally, understand the eviction process. Most states now have Tenant protection laws that will allow the tenants to stay in the property for the duration of their lease even after the sale of the property at the auction.
As the new owner you are entitled to receive the rental payments but the odds are that you did NOT purchase the property to keep the tenants. So, again you might have to offer the tenants Cash for Keys to vacate the property.
As they say, buyer be ware when it comes to buying at Foreclosure Auctions.
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