Patrick Duffy's Real Estate Blog

Northern Virginia Real Estate Foreclosure Auctions: Should I? Or Shouldn’t I?

You see the foreclosure notices in the local paper and you hear they conduct these auctions “at the courthouse steps”.  The courthouse isn’t the first place on your list of places you want to be.

Well, it’s actually a place brimming with opportunity for Northern Virginia real estate investors.  Just take a look at how many people faithfully show up day in and day out hoping to snatch up a property.

Here are four things (this is certainly not all-encompassing) to consider before joining in the great poker game that is bidding at foreclosure auctions:

Decide what your goals are. Are you looking for a long or a short term investment?  Long term will mean having your money tied up for longer and a smaller, but steady stream of income (renting the property).   Short term will mean a larger lump sum back with a quicker recovery of your investment and profits (selling the property).

Do your research before and after getting involved. These transactions involve a significant amount of risk.  I highly recommend getting a “lay of the land” before you ever participate.  Go as a spectator a few times – see how the bidding process typically unfolds, see how various people operate, who bids on what.  And once you are “in the game”, extensive research is required for each property you are considering buying.  How much is the property worth?  Are there any title issues that could impact me?  Has the roof caved in on the house?  I can’t stress enough, the importance of having good, reliable information before you bid on a property.

Get your team in place. Some team members you will need are a REALTOR, title company, insurance agent, and a licensed contractor for repairs and/or renovations.

Get your money ready. If you’ve won the bidding on a particular property, a minimum deposit, usually around $15,000-$20,000 will be required immediately.  From there, (typically) you will be required to close within 15 days.  That means getting your cash and/or financing lined up quick.  Keep in mind there are significant monetary penalties if you do not close on time.

Buying properties at auction can be a very lucrative investment.  I advise you to seek the services of an experienced real estate team when engaging in any form of real estate investment.  Please feel free to contact me anytime to see how I can help you invest in Northern Virginia real estate at 703-403-0536 / patrick@patrickduffyrealtor.com.

Stay tuned for future posts with tips on foreclosure auctions and real estate investing.