Hearing that a home is going under foreclosure leads to ideas of the government rushing in to grab it up, throwing the people out. We are all well aware that not paying our mortgage will lead to a bank foreclosure, but few understand that the government can take over everything from home to boats and cars. The U.S. government does have the right to seize property if for instance you don’t pay your taxes or have fallen behind on a veteran’s assistance loan.  Though some of this property may be used for programs in the community, most of it is sold through a government foreclosure auction.

The Process

There are free government foreclosure auction listings widely available. Some people choose to subscribe to paid services, but there is no need to do that. The simplest way is to find the U.S. Department of Treasury website and find their listings. In addition to finding homes listed, they also have everything from office equipment to boats.

State By State Guidelines

Government foreclosure auctions are a little more complicated than the usual auction where you show up and raise your hand, pay and immediately take the item home.  It’s more like an eBay auction. Each state has its own set of guidelines as far as when, where, and how you place bids on these properties. For example, some states require you to present full payment for a home before you can win the bid but in other states you may only need to have a small percentage up front. That is a big difference so you must know your state’s guidelines before participating.

Understanding Caveat Empor

One of the disadvantages of any kind of real estate auction is that once it’s yours, you can’t back out of the deal. You need to know as much information about that property up for a government foreclosure auction as possible before you decide on a bid. You will have to find a way to verify the condition of the property in question on your own.  Since some properties may still be occupied, it can be difficult to inspect the property.

If you really have your heart set on the property, you may be able to work out a deal to buy the home from the people still living in the house. In this way, the government foreclosure auction is stopped. First, you must figure out which broker is responsible for the auction of that property and notify them of your intentions. Again, laws vary from state to state.

Thankfully, the government does not directly handle government foreclosure auctions. Nothing would ever get sold. Brokers and real estate agents within the state of the property are responsible for overseeing the auction and making sure it is done correctly.