If you’ve wanted to buy real estate as an investment, you might consider buying a house at a foreclosed property auction. You can get a great value, but the process can be risky and you need to be well prepared. Here’s what you should know.

Why property is sold at auction

Homes are generally sold at auction for two reasons. The first is that a lender has foreclosed because a homeowner/borrower has defaulted on a mortgage. The other is when a county government seizes a house and forecloses because a homeowner has failed to pay property taxes. In the first instance, a trustee for the lender sells the house at a property auction to recover the outstanding balance of the mortgage. If the house cannot be sold for enough to satisfy the mortgage, the homeowner still owes the balance.

Two styles of property auction

In-person property auctions for mortgage or tax delinquencies are set for a specific day and time each month at either the county courthouse or a rented space such as a hotel ballroom.

It’s increasingly common now for property auctions to be held online through sites like www.auction.com. These sites provide basic information about the property such as when it was built, its estimated resale value, the property auction’s opening bid amount and more.

Getting educated

Buying a house through any means is a complex legal process, but this is especially true with property auctions. You may be able to scoop up a deal, but you can also buy property that turns out to be a mistake. So if you’re serious about buying a house at auction, you should definitely enlist professional help.

It’s vital to have a title company search for any liens on property that interests you. If you have the winning bid, you’ll be required to pay off the liens as well as the purchase price. A real estate agent experienced in foreclosures and short sales can help you with matters such as determining a possible rental rate on a property or whether the estimated resale value of a foreclosed home listing is reasonable. You’ll also need an experienced real estate lawyer to help you understand the various contracts, disclosure and escrow documents involved in property auctions. You may also want to enlist a contractor or appraiser to help you determine how much the house is really worth once any necessary repairs are factored in. Auctioned properties are sold “as-is.”

You can find a list of properties to be auctioned in person on the county government website or posted on a public bulletin board at the courthouse. For online auction listings,  browse sites like www.auction.com and www.realtytrac.com. Some properties that are listed end up not being auctioned because the homeowners are able to catch up on their payments or otherwise work things out with their lender.

Often you will not be able to inspect properties to be auctioned. You can drive by a property, but actually entering it is a criminal offense in most states. In some cases, a real estate agent working with the property may hold an open house. Keep in mind that homes often have not been well maintained when their owners cannot afford to pay their mortgage or taxes.

The auction

Your first step for property auctions is to register and pay a deposit, usually five to ten percent of the expected sales price of a property you are considering. You’ll also be required to show proof that you have the available funds. You must be able to pay in full upon winning the bid or, in some cases, by the next day at the latest. You may also be required to pay various auction fees. Payments at in-person auctions are accepted in cash or by bank money order or cashier’s check. The deal is not final until you have clear title, and that can take as long as ten days. During that time the current owner could file a legal objection and find the funds to catch up on their delinquent mortgage or taxes. As with a conventional purchase transaction, you should purchase title insurance against any surprise liens you might discover after you close.

Besides being the hottest month of the year, August is a time of transition. Vacation season is winding down and the school year is starting. Here are several key home maintenance chores to complete.

Transition time

Break out the backpacks, calculators, and lunch bags. Prepare a place at home for the kids to study and access a computer. Set aside the coolers and beach chairs for weekend use.

Eliminate wasp and bird nests

By late summer, pull down abandoned bird’s nests and scrub the area with hot soapy water. For wasp nests, wait until just after dusk when wasps are becoming dormant, then use wasp spray that projects a stream of 20 feet. The next day, inspect to ensure the wasps are gone before pulling down the nest. If you are allergic to wasp stings, call a professional exterminator.

Plant a fall garden

Harvest the last of your summer vegetables and prep the soil for planting a fall garden. Visit your garden center or shop online to choose vegetables that do well in your autumn climate.

Have carpets cleaned

Traffic in and out of the house peaks in summer and so does the dirt tracked inside. Have your carpets professionally cleaned in August so that they look and smell good for the upcoming season. Double-check to ensure the contractor is following the CDC recommendations for safety during the pandemic.

Everyone is stressed and anxious about the COVID-19 crisis, but one positive to staying at home is the number of  chores you can check off your list. Spring showers and increasingly warmer temperatures signal the beginning of April —  a great month to prepare for gardening and summer living.

1. Inspect for animal intruders. Just like humans, animals seek warmth in winter so look for evidence of squirrels, raccoons, rats and possums that may have clawed or chewed a hole in the roof flashing to access your attic. If you find evidence of invaders, call a professional wildlife removal service. They are considered essential home services in most states.
2. Trim tree limbs. Survey trees near your house for limbs growing too close to the roof or siding. Hire a professional arborist, if limbs are too high, extremely heavy, or near power lines. Landscaping professionals are also on the list of essential services in many states so they are still available for hire.
3. Organize and clean the garage and shed. Clean and organize spring and summer gardening tools and toys. Encourage family members to put belongings away in their proper locations.
4. Eliminate mosquito breeding areas. Melting snow and spring rains may leave puddles around your yard or in landscape decorations. Remove standing water to discourage mosquitos.
5. Check for wood-destroying insects, such as carpenter ants and termites, which can damage your home. Carpenter ants are relatively easy to spot outside, entering your home through small openings. Look for the mud tubes left behind by termites. If spotted, call a pest control professional, they too should be available to treat outside the home.
6. Time for an AC inspection. The hot summer is right around the corner, so it’s time to have your air-conditioning system professionally inspected. A service technician will inspect the air handler, clean the air conditioner condenser coils, inspect the evaporator coil and check the refrigerant level. Depending on where you call home, this chore can be done in April, May or June, so you may decide to wait until the stringent social distancing guidelines are lifted. Meanwhile, do your part to keep the AC system running smoothly. Change the filters on a regular schedule. Outside, keep bushes cut back from the condenser coils so they can breathe.
7. Inspect the sprinkler system. Turn on the system and inspect as it switches from zone to zone. Check for damaged sprinkler heads. Replace or adjust as needed.
8. Gardening goals. In March or April, depending on your climate, it’s time to start thinking about a spring and summer garden. Clear raised planting beds of debris, and turn soil. Most seeds and plants can be purchased online. Start seedlings inside. Do not plant until after the last frost date in your area.
9. Provide nutrients for your landscape. Depending on your climate zone, March or April is the time to apply fertilizer and weed control. Consult local agricultural extension services online for gardening expertise.
10. Spring clean. On a warm day in April or May, open up the windows and air out your home. Clean carpets, upholstered furniture and fabric window treatments. Vacuum window blinds and behind large furniture pieces. If you haven’t already, clean windows and repair any broken screens. The kids may actually enjoy helping with the lower level!

As the COVID-19 outbreak causes real estate agents to move away from holding open houses, many pros have quickly transitioned to online marketing for their listings. Here is what your social media savvy agent knows for sure.

Real estate websites. First and foremost, your home should be listed by your agent on the Multiple Listing Service (MLS) and mainstream real estate websites where most people start their search. Realtor.com is owned by the National Association of REALTORS® and receives more than 30 million unique visitors per month.

Agent websites. Agents should have professional pages with their listings easily available. Your home should be professionally photographed and the pictures posted with your listing. A virtual tour is increasingly sought by home shoppers and should be offered, especially now. Agents who post regularly to blogs will rise in Google search results attracting more followers to their sites and your listing. These blog articles can also be posted to social media platforms to get more visitors.

Social media.  Following these basics, agents should link business Facebook, Instagram and Twitter accounts to their websites. Your house should be marketed on several social media platforms. Good agents will have a healthy budget for buying Facebook ads, and should be cognizant of Facebook’s ever-shifting algorithm for how ads get placed. By placing specific house ads and posting articles, social media becomes a powerful tool in selling your home.

Photos and videos.  A professional photographer and videographer should be hired to shoot top quality pictures of your home, as soon as appropriate. Virtual tours are becoming an expected staple.