FAQs for Buyers
Please sign up for our Real Estate newsletter at the bottom of the home page at motleys.com, and we’ll keep you updated on our upcoming sales! You can also check out our website, https://www.fortistrustees.com, for current and upcoming foreclosure sales, or motleys.com/realestate for information on not only foreclosure sales, but also quarterly RVA Tax Sales and upcoming Accelerated Sales.
- Do as much research as you can on the property. Call us with any of your questions!
- Determine an amount you are willing to spend on the property, keeping in mind there is a 10% Buyers Premium fee.
- Register to bid in advance of the sale.
- Secure means to pay your deposit.
- Confirm all details of the auction. Pay close attention to the Terms and Conditions and Buyers Premium.
- Attend the auction and bid!
A Buyers Premium is a charge in addition to the winning bid price of an auction item. The winning bidder is required to pay both the winning bid price and the percentage of that price called for by the Buyers Premium. For instance, if you buy a property for $100,000 and there is a 10% Buyers Premium, you will pay a $10,000 Buyers Premium, or $110,000 for the property.
Though there are exceptions, in most cases, no, you cannot inspect the property prior to bidding. Check the website for information that may be provided, such as a property survey, appraisal or tax record. Keep in mind, you are buying the property as is.
Properties at auction offer a great value and a quicker transaction! Buyers are realizing that purchasing a repossessed property at auction can save them up to 30%, offering a more affordable way of getting the property. Do your research, understand the property is being sold “as is” then place your bid! Buying property at auction is a great way to invest!
Live foreclosure auctions are free to attend and open to the public to ensure that a home being foreclosed upon receives the highest possible recovery for the bank or lender and the smallest deficiency for the borrower. Anyone can attend; however, if you want to bid, you’ll need to register. In almost all cases, you’ll have to prove that you’re in possession of sufficient funds to pay THE DEPOSIT and close in 30 to 60 days.
An individual or business’s failure to pay their mortgage will result in the lender reclaiming the property through foreclosure. Initially, banks attempt to sell foreclosed homes, or commercial properties, at auction. Banks refer to these properties as OREOs, or Other Real Estate Owned. Banks usually want to sell OREOs as quickly as possible, which is why auctions are the preferred sales method.
Most properties have an established Reserve Price which must be met in order for the property to be sold. If the highest bid at the auction is insufficient, the lender then gets title to the property and holds it as a bank-owned (or REO) property. The purpose of a foreclosure auction is to get the highest possible price for the property, in order to mitigate the losses a lender suffers when a borrower defaults on a loan. Although there are occasions when a winning bidder can be declared even if the Reserve Price isn't met, this occurs when a property is sold “subject to” the seller's approval.