Financing a Foreclosure
I've been given several different answers from friends and acquaintances in regards to purchasing a foreclosed home at Auction. I have heard both, that you need all cash to be able to bid on properties in foreclosure. But I have also been told that you can have the winning bid and use a loan to secure the purchase of a foreclosure.
So, in the bigger pockets experience, which is it? Can I secure a foreclosure property at Auction with a loan that has been pre-approved? Thanks for any help.
@Stephen Warnock - We've been buying foreclosures for a few years. Not sure if it is a state-by-state answer, but in Tennessee you have to have buy the property immediately with all cash. A few years ago they gave you 24 hours, but now it is immediate or the house goes to the next highest bidder.
#2 Foreclosures Contributor
- Paradise, CA
In California and many other states, you need cash, at the time of the auction. let's not mix public foreclosure auction with things like "auction.com". They are two different animals. A true foreclosure auction requires cash at the time of sale.
Anything at auction will typically be all cash however there are instances where you can buy foreclosures that are now bank owned REO's with financing assuming the property is in livable condition. Auctions and REO's are different beasts.
Typically need cash . Then get title insurance after asap and try and do a cash out refi.
After doing some light research it looks like this is a state-by-state rule. So in other words, nothing that gives you a blanket rule for all auctions in every state.
Which is consistent with what most people's feedback is here.
I appreciate everyone's feedback. It sounds like it's possible, unlikely, but possible. Also, creative financing would make this possible as well... Buy with investors cash and quick refi as an option. Thanks all.