Before and After Auction Deals: How?

Question

Hey all,

Here is a question from a rookie. A lot of people say deals happen before or after a foreclosure auction. I am wondering how exactly those deals take place. Who do you approach, how do you make an offer?

I am especially interested in the "after-auction" thing. Would this mean going to the bank and making an offer? How do I find out which bank I should go to? Also, how much below the asking bid can I go in my offer?

There is an auction coming in my area and I saw a few nice places that could fit my starter's budget. I wonder if there is a way to make them even better deals.

G.

PS: I'm new to the forum, but holding off on the introduction part until I relocate to my desired market in few weeks. I've been reading and jotting down things like crazy since I found this helpful site.

Jon Holdman · Answer

Before the auction you find deals with marketing to people in trouble.  Either directly, such as sending letters to people who've had a notice of default filed against them, or indirectly with "we buy houses" signs.  These deals may involve a short sale, where you convince the bank to take less than what they're owed.

After the auction the property often goes to the bank.  These become REO or "real estate owned" properties.  You can sometimes buy them from the bank.  More often, the bank will list them with a local agent.  In many places, a lot of these listings end up in the hands of just a few agents.

Whole books have been written about this, especially the pre-foreclosure part.  James already pointed you to some relevant forums (sorry, been distracted and didn't see James post until I started to reply. Dang day job anyway.)

Jon