Can You Make Money Buying Foreclosures at Auction?
Can You Make Money Buying Foreclosures at Auction? Yes. I’ve done it. I help other people do it. But also, you can get burned quickly if you don’t know what you’re doing. Even seasoned investors make grave errors.
Every state and county are different, but certain rules apply no matter where you are.
- Look at the property. Sounds elementary, right? You’d be surprised how many investors bid at auction without ever seeing the real estate. And it would shock you to see the insides of some of these houses and condos. I’ve seen graffiti on walls, cabinets and fixtures removed, even insulation torn out of houses.
- Know the laws. Just because something sells for a cheap price at the auction doesn’t mean it’s a good deal. Sometimes there are senior lien holders, so if you buy, you assume the burden of paying off any senior liens. For instance: In resort markets, often the homeowners’ association is the plaintiff in a foreclosure transaction where the defendant also owes money on a mortgage and real estate taxes.
- Know values. You need to know not only what similar properties have recently sold for, but also the current listing prices of competing properties.
These are just some of the basics. Yes, you can make money buying foreclosures at auction, but rookies can get burned quickly. So before you dive in, it’s best to consult with someone who’s experienced in your market.
Kay Van Hoesen represents private-party investors, private equity groups, and hedge funds at foreclosure auctions. She consults with mortgage lenders and individuals needing real estate advice in Myrtle Beach and the Grand Strand.
Kay is founder, senior appraiser, broker-in-charge and owner of Certifax, Inc., in Myrtle Beach. With local appraisal experience since 1986, she and her staff have developed more than 35,000 appraisals, consulting on more than $7 Billion in local real estate.
Kay is a state certified residential real estate appraiser in both South Carolina and North Carolina as well as FHA-approved. Additionally, she is a Realtor and licensed real estate broker in South Carolina, a participating member of the National Association of Realtors, the Coastal Carolinas Association of Realtors, and an Associate Member of the Appraisal Institute.
If you’d like representation at the auctions, we research comparable sales, senior liens, unpaid taxes and bid each month for out-of-town investors. If you’d like our help, shoot us an email ([email protected]) or call at 843-497-9155, Ext. 103.