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Tampa Home Auctions and REO’s

Published by Lance Mohr | Filed under Foreclosures, Home Buying Tips

There are many advertisements for home auctions in the Tampa area.  You may be wondering how this works and if you will actually get a better deal than a foreclosure home, short sale or a bank owned home.  These types of homes have literally flooded the Tampa real estate market lately and are being sought after by investors and regular buyers.  You must know that with these home auctions you are going to have some pretty stiff competition.  There are also fewer auctions than the typical home selling avenues such as short sales and bank owned properties. 

The other option is a Tampa REO; which is a Real Estate Owned property.  REO’s are owned by a lender, such as a bank.  An unsuccessful sale at a foreclosure auction is the result.   This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank. The minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys’ fees.

After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property.

In summary, either option you choose will get you closer to obtaining your investment goal.  The outcome you want is to purchase a property for less than market value and hang on to it until it appreciates.  At that point you can re-sell it if you wish, cashing in your investment, or you could simply keep it longer for a larger investment.  Either way, if you do your homework you can’t go wrong.

Please give our team a call if you have any questions on foreclosures or Tampa  REO properties.

January 21st, 2009