Be aware of potential risks and auction requirements before buying Texas foreclosed homes at auction
Buying Texas foreclosed homes at auction is one way to save money on a home, but you should be aware of potential issues, like title liens and property conditions.
In Texas, foreclosed home auctions are held on the first Tuesday of every month. These auctions take place at the courthouse of the county where the property is located. This date will not change even if it is a legal holiday. A designated trustee is responsible for auctioning the property.
When buying Texas foreclosed homes at auction, you should be aware that such properties are sold in as-is condition. This means the property may require repairs. In Texas home auctions, foreclosed properties are typically not open for you to view or have an inspection. Consequently, you likely not likely know the condition of the property before bidding.
Additionally, when buying Texas foreclosed homes at auction, you should know the property may have various liens for which you will be responsible after purchase. Even if you purchase the property from the first lien holder or the lender, other liens may exist. The most common types of liens on foreclosed properties are:
- Income tax liens
- Contractor liens
- Homeowner's association liens
One way in which you can help to mitigate this type of risk is by conducting a title search prior to making a bid on a foreclosed property at an auction. If you are working with a real estate agent, he or she can help you get a title search. Otherwise, you may have a title clerk or county clerk research the title information.
You should also be prepared to make a down payment the day of the sale if you buy a foreclosed property at an auction in Texas. Find out in advance the required deposit amount, as it typically ranges from 5-20 percent of the sale price. You will need to present a cashier's or certified check for that amount and show proof of funds for the rest of the purchase or a pre-approval for financing. Many auctioneers require proof of funds before allowing you to bid.
Once you win an auction, you don't have to worry about the original homeowner reclaiming it. Texas homeowners do not have a right of redemption that allows them to reclaim the property by paying the balance on the mortgage.
You can save money on a home at a foreclosure auction. Just be aware of the risks and requirements of buying Texas foreclosed homes at auction. Browse foreclosed properties in your area on RealtyNow.