Buying a foreclosed home at a Hawaii auction allows you to purchase a home at a substantial discount. You should find out first if there are any liens on the home as well as if there are any unpaid taxes by ordering a full title search on the property from a title company in the area. It is also important to confirm the status of the auction, location and any bidding procedures. Owners still have an opportunity to postpone the auction by paying the past-due amounts. There are no post sale redemption rights in Hawaii. You should consult with a Hawaii foreclosure attorney to find out the foreclosure laws before bidding on a home at a foreclosure auction in Hawaii.
For instance, there are currently 243 homes either in pre-foreclosure, auction or REO bank owned in just the Honolulu area alone. In fact, right now there are 28 homes available to be sold at foreclosure auction. The average listing price for a home in Honolulu is $905,862. The median sales price was $380,000 during the period July 11, 2011 through September 11, 2011. With prices like this, it is no wonder that foreclosure auctions in Hawaii have become so popular amongst buyers because they know they are getting a home at bargain price with equity.
There are at least seven good reasons to buy a foreclosed home right now:
- A foreclosure property allows you to get into the real estate investment business or buy your first home without paying full market prices.
- You get to purchase a home in a neighborhood you may not be able to afford otherwise.
- You get a property with built in equity.
- Prices are so affordable right now; there is simply no reason not to buy.
- Interest rates are low if you need to obtain financing for a pre-foreclosure short sale or a REO.
- You get tax incentives for purchasing a home.
- You can rent the property out as a vacation rental or year around rental and generate both income and appreciation on your property.
There are few things that are particular to auctions that you should keep in mind before you purchase a home this way. You will need to determine a bid amount. This depends on your financial circumstances. You will need cash to pay for the home so you want to make sure you have your cash available to bring to the auction in the form of a cashier’s check. If you are the lucky bidder selected, you will need to pay for the home after the auction. If you have a current home, you may want to obtain a line of credit or a home equity loan if you don’t have extra cash lying around so you can bid on the foreclosure property. It’s good idea to arrive at the auction early. You are responsible for evicting the owner or tenant from the property as well and paying for any liens so make sure you budget those costs into your bid. If you are the winning bidder, make sure you get the ownership document from the auctioneer.
Auction properties are quite in demand so you may find stiff competition. Buyers should act quickly when they identify a foreclosure property before they may lose it to another buyer. Auctions are one place to find foreclosure bargains, but there are also pre-foreclosure opportunities with short sales in Hawaii and REO bank owned properties. You can find these homes listed with local Hawaii Realtors who advertise them on the MLS, on the Internet and in the newspapers to attract buyers and other brokers to bring their buyers. Banks are anxious to unload their REO inventory so you can pick up bargains by making an offer on a REO as well. REO’s and short sales offer buyers less risk because they can be inspected, and you can purchase title insurance. The homes are delivered vacant so no need to worry about evictions, and liens have already been paid off by the bank that owns the home. Either way, buying a foreclosure or pre-foreclosure property is a great opportunity to own Hawaii real estate. So before the opportunities go away, you should take advantage of purchasing an auction or foreclosure property today.