Buying a house via foreclosure auction

Go watch a few auctions before you go to the one for your house.   Are these auctions run by the Sheriff in your area?  It's possible that the banks give the Sheriff a "reserve price" before the auction starts... that's the way it was done in the town I used to live in. 

Good luck.  sometimes it's just some fresh paint and new carpet... other times its a gigantic mess that is more trouble that its worth. 

All auctions are now done online. It's like ebay except a LOT more expensive.

The opening bid is 10% of the assessed tax price. If no bids on that in the first 30 mins they open it at $0.  What I'm noticing on old auctions is the winner of most of them is the plaintiff bank.  Unfortunately the winning bid is hidden ;(

Not just your opinion. FS468.389.1.f.

Check the "Right of Redemption" laws in your state.

In our state, it's 1yr from the date of foreclosure. If the previous tenants come up with the money then they just have to pay it, and they get the house back and you're out.

We looked long and hard at one but unfortunately, the funds we needed for the repairs just weren't there as "cash on hand" so we couldn't pull it off.

Good luck.

What kind of pinko commie law is that?  I checked and fortunately FL has no redemption law.  I cannot imagine who would buy a foreclosure in a state like that.  I wouldn't be able to sleep knowing my house might get yanked out from underneath me.

Not to side track my own thread but what about any improvements you have put into the house.  What do you get out of it as the current owner?

Or do people just wait the 1 yr before they buy the foreclosed property?

Be VERY careful.  We owned a house.  There were changes to the environment around the housing development (logging on hill above) that cause our home to flood each year.  We went through 3 floods of 6'+ of water. 

The county was going to buy our home (and some others) but had to wait a year and a half to recieve federal funding.  We went completely broke in the home and had to walk away from it.

Despite the county trying it's best efforts to work with the mortgage company, the mortgage company stonewalled them.  The mortgage company told the county, "If you want the house, then you can buy it at the auction." even though the county was offering full price on the home.  It was a completely stupid situation. 

Because it was an auctioned home, no disclosure was needed.  Our neighbors tried to talk to everybody coming by the house to make an offer on it.  Unfortunately, Somebody bought the home from under the county's nose.  It then flooded another 3 times in the first 2 months of the new owner moving in. 

It was a very sad scenario to watch it devastate another family.  The county was then able to purchase it, in which case they bulldozed it.

That's the saving grace. If I spend additional money in upgrades then that price is added in. So, the value is the auction price plus interest plus permenant repairs plus additional fees.

Surprisingly it doesn't happen too often though. In most cases, people can't make the monthly rent/mortgage and it's really unlikely that they'll be able to recover those costs plus the upgrades within a year, unless they luck into some magic big payday.

I just know we looked into it briefly but backed away when we saw the damages that were done to the house.

"Is there a right of redemption in Alabama?

Yes, Alabama has astatutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs within twelve (12) months after the sale. A Deed in Lieu of Foreclosure does not provide a right of redemption nor does it permit a deficiency judgment."

http://www.foreclosure.com/statelaw_AL.html

Thanks for all the advice.  This home is not your "normal" foreclosure.  It was a guy who got in over his head and had to declare bankruptcy and left it in very good condition.  It's not a cheap house either (even at foreclosure prices).  It's in a nice neighborhood and has been secured (no squatters).

So while lots of these points are good to think about some do not apply in this case.

I have consulted an attorney who is going to talk to the bank to see if they'll sell before the auction.  This would allow me a chance to get into the home before purchasing (I can see quite a bit from the windows but as you know the devil is in the details).