Alaska foreclosure actions are conducted by judicial or non-judicial process. If the deed of trust contains a power of sale clause, the lender may foreclosure by private trustee sale. Most foreclosures in Alaska are conducted by judicial foreclosure which means the sale needs court approval before the title can be transferred to the new owner. If you decide to bid on a home at a Fairbanks, AK foreclosure auction, you should check to make sure whether or not the purchase requires court approval by asking the auctioneer or consulting with an Alaska foreclosure and real estate attorney.
Auctions are open to the public. You should check with the auctioneer to make sure you follow all the rules such as registering on time, bringing a deposit, arranging for financing, signing the proper documentation and understanding in general the bidding procedures and Alaska foreclosure laws. If your bid is selected, you will expect to make payment arrangements after the auction. Cash is generally required so you should have your funds ready. However, with a judicial foreclosure, even if your bid is chosen, the court must approve the transaction before the transfer of title can be conveyed to you. If the auction is conducted by a trustee sale, then no court approval is required. Alaska law does not allow the former owner to redeem the property after the auction sale either. So you don’t have to worry about rehabbing a property and then a former owner coming and trying to redeem their property back.
Why Purchase a Fairbanks Foreclosure?
Purchasing a foreclosure at a home foreclosure auction gives the buyer an opportunity to purchase a deep discounted property because the banks that own the homes need to get them off their books, and they are willing to take a lesser price to sell their foreclosure homes. Many of the homes are in bad or poor condition so it is imperative that you conduct an inspection to find out the home’s condition. Homes that need major systems will cut into your profit because it is expensive to fix home systems such as roofs, plumbing, electrical and foundation problems. Don’t be discouraged though because there are plenty of foreclosure homes that just need cosmetic repairs and some are in move in condition as well. If you are handy you may be able to make some of the repairs yourself and save a bundle of money.
Many investors and buyers are renting out their foreclosure properties because rentals are in high demand. Others are rehabbing them and turning around and selling them. First time home buyers are purchasing foreclosure homes at auctions as well to live in as their primary residence so you may find many other buyers competing to bid on the home at the auction. Bidding goes fast so don’t get caught up in the excitement and overbid.
What You Should Be Aware of?
Foreclosure auction homes give you a chance to pick up a home at bargain prices. However, there are more risks buying homes at auctions because you are responsible for paying off any liens that may be filed against the property, evicting any owners or tenants and making any repairs. Homes are sold in an “as is” condition. You are unable to get title insurance so you should always perform a title search by hiring a local title company to search the records to find out if there are any liens or property use restrictions. It is also a good idea to check with the local zoning authority to make sure the home is zoned for the way you intend to use it, and check with the local building and safety department to make sure all the permits are in order and the home is in compliance with local building and safety codes. Otherwise, you will have to bring the home up to code, and this can also be expensive. There are no disclosure documents given to you when you purchase an auction home opposed to when you purchase a resale or new home from a private party or builder so you must do all the investigations on the home yourself.
Remember, just because the home is a foreclosure does not always mean it is priced right. It is always smart to check area comparable sold prices to make sure you don’t over bid and then end up paying for your mistake for years down the road. A local Realtor can give you a free comparative market analysis which tells you how much the homes are selling for in the area, how many days they are taking to sell, the number of homes currently listed and available, and the number of homes that are currently under contract, then you have the confidence that you are getting a home with built in equity.
Right now is a great item to purchases homes at foreclosure auctions in the Fairbanks area. There are also pre-foreclosure short sales and REO’s (real estate owned homes) to purchase from the banks that own them. Short sales and REO’s are also good opportunities to get a home at or below market value.