How to Bid on a Repossessed Home in DuPage County

With the downturn in the economy, many homes have been repossessed or are known as distressed properties. Bidding on a repossessed home can be a great value and save a prospective buyer anywhere from 10 to 70 percent because banks or government agencies are eager to unload the properties. However, when bidding on a repossessed home, the buyer must remit all funds at the time the auction closes. Unless you have a large cash reserve or are able to arrange a large reserve from your lender in advance, bidding on a repossessed home or distressed property may not be possible for the average consumer. Bidding on a repossessed home is also a challenging process that requires extensive research, so some buyers may want to rely instead on the expertise of a real estate agent.

Two Ways to Bid on a Repossessed Home

There are two options for bidding on a repossessed home:

• Through a trustee/lien. All sales are made public knowledge. Check your newspaper or contact your local county courthouse. Before actually bidding on a property, you may want to attend an auction or watch a webcast and see how they operate. Do not bid too early or you will only push the price higher.

• Online. You can also bid on repossessed properties online. Try the websites of Fannie Mae, Freddie Mac, credit unions and major banks. eBay’s real estate section also offers prospective homebuyers the opportunity to bid. If bidding on eBay, you need to know whether you’re bidding on just the down payment or the total amount. Read the fine print, and do your research before bidding.

When you’re ready to bid, contact the lender and make an offer. Read below how to determine the market value and reduce the sales price that’s listed by up to 40 percent. If that offer is declined, resubmit an offer of 30 to 35 percent below market value.

Before Bidding on a Repossessed Home - Research and Inspect

Once you have located a repossessed property you’re interested in bidding on, you need to research the property. Do a title search so you can determine if any back taxes or a second or even third mortgage are due on the property. The winning bidder will be responsible for all debts past due.

You will also want to determine the market value of the property. Look online at your local property appraiser’s office or tax collector’s office. Find recently sold properties that are similar. You can also consult a real estate broker to do this research for you, but they will charge you for this service.

Just as important when bidding on a repossessed property is to inspect the property. Many repossessed homes or distressed properties have fallen into disrepair. If the home needs a lot of work, get an estimate from a reputable contractor. Too many repairs and the home is no longer the bargain you are looking for.

Using a Real Estate Agent Instead of Bidding on Repossessed Homes

Bidding on a repossessed home is challenging and time-consuming. Buying a home is huge investment. Many buyers choose to use a real estate agent to do all the research and background work for them. If this is the route you would rather take, make sure you look for a CDPE (certified distressed property expert). These real estate agents have been trained and certified in dealing with foreclosed or short sale homes.

Should you Bid on a Repossessed Home?

If you have the time and knowledge it takes to do the background research on a repossessed home, you could save yourself a great deal of money off the market value of the home. Keep in mind, however, that you will need to add the cost of any repairs to the home to your bid in order to determine the true savings. If you’re a DIY (do it yourselfer), the savings could be substantial. Doing your homework on the property before bidding is imperative.

If you or someone you know is interested in buying or bidding on a repossessed home or is looking to buy or sell conventional real estate please call or email Katie Oakes with Keller Williams at 630-545-9860 OR WheatonHomes4Sale@gmail.com. For further information or to start viewing properties for sale for free please visit WheatonHomes4Sale.com