What is the step by step rules to a foreclosure auction??

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1) What due diligence should be performed prier to the auction? (as much as you can, comps, look at the property, drive the neighborhood ....etc) - what beyond that can a everyday investor perform? You can not be an "everyday investor, this is a specialty, study this market!"You need to to your due diligence is true, but you also need to understand what you intend to do with the property if you are the accepted high bidder (keep it, flip it, renovate it, partner it, borrow money on it). On a foreclosure auction, I would suggest that you find the publicized foreclosure notice, or go to the court house and look up the file, you may be able to find it on line. The auctioneer or trustee will usually open the bid at what the balance of the mortgage plus expenses are. The foreclosure is a legal method to transfer the property from the mortgagor to the mortgagee (the bank). You should read the notices to see what the balance is before you decide to bid. If the balance and expenses are higher than the market value move on or wait for the next sale.Idea: After a no sale at the auction, make a written offer to the bank on the price you want to buy. They may accept it. The bank will usually give the listing to an agent to try to sell at a price they need. It is sometimes difficult to buy at F/C auction at an equity profit that makes sense.Idea: Go to the property, find the owner, try to control the property before the auction, offer to make up the back payments if this there is equity. Check the foreclosures laws in your state. Sometimes you are better off making the offer through a third party, lawyer or agent, you want to be arms length to be safe.Try to inspect the property before bidding, sometimes the mortgagor (owner) will damage the property just to get even with the mortgagee (lender), like removing all the dry wall, pouring cement down the commode, blocking the vent line (from the roof) with a tennis ball (keeps toilet from working right), short circuiting the electrical system, over flowing the sinks....etc.Be aware you are paying interest from the date of the sale until settlement, if it take the bank 6 months to ready this property for transfer, it could cost you thousands of dollars.Be very careful............ it is easy to make a mistake......look at the property, talk to owner, talk to trustee and auctioneer, read the contract before bidding.2) How do I prepare for the auction? Do I get multiple certified checks and for how much. lets say I am expecting to bid on the property up to 250k Do I need 250K for the auction or do I bring 10 % in certified checks. I noticed some people go and have multiple nominal, but what is the proper formula?Read the terms of the sale, it will tell you what you need to do....deposit how much, second deposit how much, interest on the unpaid balance, how much, possession after settlement (do you have to evict the mortgagor by legal process.? And pay for it) who pays settlement cost, how much? When do you need the full balance of the bid price? Bring a certified check made out to you to be sign over the the auctioneer/trustee if you are the high bidder, if not just take your check back to the bank.There are NO Formulas (other than know the game, don't make a mistake, research everything, have your money ready!) when you are dealing with the bank at a F/C auction, you are at their mercy! Be careful!3) What should I expect at the auction. To see the pros there, folks who have been buying at F/C auctions for years and probably making lots of money, watch what they do, when they bid and when they don't. 3) What should I expect at the auction. For your first time, expect to make mistakes, they could be costly. this is my first time as I always have to work, but now get the time to actually (go, but to observe only, do not bid!) Will it be a quick decision, will it be postponed, etc. The sale is often postponed due to the mortgagor paying up or negotiating with the lender. When the bidding starts, it will be fast.4) if I should get the property, what happens next? Get ready to go to settlement, the trustee will have to advertise for three weeks the results of the sale, this may take two weeks to get it publicized, settlement will be scheduled, you will be notified of how much you need to bring; settlement cost, interest on the unpaid balance, title cost, lien report and what ever else they can charge you; review, coping charges, notarization charges. You need to know all of these charges in advance of closing.You also will not get the key until settlement (if it is vacant, get permission to secure the property and to have access. You need to know what to do if the mortgagor is still in the houses, how long and how much will it cost you to evict them, careful now, there may be a squatter in the property. You will have to get rid of them also!Any information would be greatly appreciated. Don't bid at auction until you've see and studied 10-20 foreclosures first. You need to know this market very well, to understand what could happen and how much more you are expected to pay and what you need to know once you get possession. I feel that the deal is what we are all looking for especially considering that the markets are hot and anything on the MLS is flying off the market. Really? Did an agent tell you that? I suggest you forget the MLS and start dealing with FSBO's and Expired Lists, sending direct mail out for real estate wanted, advertise for real estate wanted. In my opinion there are way too many potential problems when buying foreclosures. Be careful. There are easier and safer ways to invest for a beginner. Need to be creative (banks, trustees and auctioneers do not understand "creative" when it comes to the Court House Foreclosure Sales) in some way or try different avenues which is why the auction sounds exciting. The auction business is exciting, and can be profitable, I have been involved with auctions for many years, I own an auction company.TO DO: Get on the mailing list of auction companies in your area, ask which sales are owner sales (they can be profitable), understand all the terms and costs involved. Be careful. ALWAYS go the property, try to look inside, talk to the owners, find out what their problems is, see if they will accept an offer now, before the auction (check the foreclosures law in your area), you should be arms length when dealing with F/C'sCharles

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glad I could be of some help.

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You are welcome, thanks for taking the time to read it.

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great reply. This brings such value to bigger pockets members, thanks so much!!

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Thanks @Charles Parrish! That was very helpful!!

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@Michael Gertz:I have been to an auction.com one in California. I was just there as a observer but my friend there was a bidder. He brought the max he would bid. At this auction you had to pay 100% at the auction. Due diligence was limited to seeing the outside of the property. You couldn't get a look inside. At my auctions most properties got postponed as the lender is trying to work something out with the owner. If you get the property you take possession there but I don't know the details because we didn't buy one. Good luck.