Buying a home at auction requires understanding the foreclosure and auction process, according to RealtyTrac. The buyer must track foreclosed properties, visit them when possible and be prepared to act quickly. Because bidding procedures vary by state, the buyer should be aware of the specific procedures to follow before bidding. He should research the value of the property and the amount of any outstanding liens on the property to determine whether and how much to bid.
Buyers often must pay for properties bought at auction with cash or put down large cash deposits, Realtor.com explains. At some auctions, a cash deposit is required before a bidder can even place a bid. The bidder should also get pre-approved for a loan for a certain amount before the auction and should bring documentation from the lender.
Buyers at auction may not be able to inspect the home in question until after the auction is over, according to Realtor.com. Most foreclosed homes require significant work to plumbing, electrical systems or other infrastructure, and buyers sometimes have to evict tenants. Evaluating the home from the outside may provide some information on the condition of the home. Potential bidders should do as much research as possible before the auction and should be cautious when bidding.