How to Bid at a Foreclosure Sale

A foreclosure sale is a proceeding in which a bank (or other secured creditor) sells real property at auction due to the property owner's failure meet his or her obligations under the mortgage. Bidding at a foreclosure sale can be a good way to find and purchase affordable property but it does bear some risks. Here are some tips to assist you in bidding at a foreclosure sale.

Understand the procedures. Read your state's statutes regarding the foreclosure sales. Familiarize yourself with the process by attending foreclosure sales and observing the bidding procedure.

Read the notices. Notices of default and sale are generally posted at the local courthouse and in local newspapers or journals. These notices contain the name of the borrower, the property description and the date and time of sale. They will also provide the name of the person or firm you can contact for more information regarding the foreclosure sale, including the starting bid amount.

Do your research. Before even considering bidding at the sale, you need to research the title to the property. You will want to determine whether there are any other mortgages on the property, any lawsuits against the homeowner, any mechanics liens on record, or anything else affecting the status of title to the property. You should also physically inspect the property to determine its condition.

Attend the sale at the date and time set forth in the notice of default and sale. Listen carefully to the bidding instructions to see if there are any conditions or terms to the sale. Make sure that you are prepared to go forward with bidding on the property in light of any such conditions.

Bid. You will usually need certified funds, such as cash or a cashier's check, to bid on the property. You should call ahead of time to confirm the starting bid. Be aware that there may be other bidders at the sale that can increase the bidding amount. Know in advance which amount you are willing to bid up to and don't exceed it.


You should consult an attorney experienced in property and real estate matters if you have any questions at all regarding how and whether to bid at a foreclosure sale.

Be aware that you can spend a lot of time and money preparing to bid at a foreclosure sale only to learn at the last minute that the sale is postponed or terminated, or, even if it goes forward, you may not be the successful bidder. Be sure to weigh these risks before starting the process of bidding at a foreclosure sale.

Even if you are the successful bidder, the borrowers may still be living on the property. If this is the case, you will likely need to initiate legal action to have them evicted. Be sure to consider this potential problem in determining whether you want to bid at a foreclosure sale.