Can I get a mortgage to buy at a foreclosure auction?

Usually not in the normal way. Most auctions require payment in cash or certified funds within a short period set by the auction rules, which leaves no time for a mortgage. Buyers typically use their own cash, a line of credit or short-term financing arranged in advance.

Can I inspect the inside of an auction property?

Usually not. The home is often occupied or locked, and the trustee or sheriff has no obligation to provide access. Bidders typically rely on exterior inspections, public records and comparable sales, and build a repair cushion into their maximum bid.

Do liens go away after a foreclosure auction?

Not always. A foreclosure generally clears liens junior to the loan being foreclosed, but senior liens, property tax liens and certain other claims can survive. Rules vary by state, which is why a title search before bidding is essential.

What happens if no one bids?

If no third party outbids the lender's credit bid, the lender takes the property back and it becomes a bank-owned (REO) home, which is often listed for sale later.

Experienced buyers and investors with ready funds who want to bid on properties at trustee or sheriff sales.

Buying at a Foreclosure Auction

A foreclosure auction is the public sale where a property is sold to satisfy a defaulted loan. Depending on the state, it may be run by a trustee under a deed of trust or by a sheriff or court officer after a judicial foreclosure. The lender usually opens with a credit bid, and if no one outbids it, the home becomes bank-owned.

Auctions can offer lower prices, but they carry risks other purchases do not. You often cannot inspect the interior, payment terms are strict, liens may survive the sale, and the home may still be occupied. Successful auction buyers do most of their work before the sale, and they set a maximum bid they will not exceed.

Foreclosure auction roadmap

6 steps from first search to keys in hand. Each step has a guide.

Step 1: Learn how auctions work in your state
Find out who runs the sale, where it is held or listed online, the deposit and payment terms and whether a redemption period applies.
Read the guide
Step 2: Build a target list
Track notices of sale and auction listings, and drop properties that do not fit your budget or strategy.
Read the guide
Step 3: Research title and condition
Order or run a title search, check for senior liens and taxes, and assess the property from the outside.
Read the guide
Step 4: Line up funds
Have certified funds or proof of funds ready in the form the auction requires, since most sales do not allow financing contingencies.
Read the guide
Step 5: Set your maximum bid and bid
Work back from value, repairs, liens and costs to a firm ceiling, then bid with discipline.
Read the guide
Step 6: Complete the purchase and take possession
Pay the balance, receive and record the deed, insure the property and follow your state's lawful process for any occupants.
Read the guide

Foreclosure Auctions guides

How Foreclosure Auctions Work: A Guide for First-Time BiddersGuide · 8 min readA foreclosure auction is the public sale where a lender's collateral is sold to repay a defaulted loan. Rules on notice, payment, title and redemption are set by state law, and buyers usually pay cash for a home they have never been inside. This guide explains how the process works so you know what you are bidding on.How to Build a Foreclosure Auction Target ListGuide · 7 min readMost properties scheduled for a foreclosure auction are not worth bidding on, and many never reach the sale. A target list helps you find the scheduled sales in your area, screen them quickly for equity, price, location and condition, and keep track of postponements so your research time goes to the few properties that fit.Researching a Foreclosure Property Before the AuctionGuide · 6 min readAt a foreclosure auction you usually buy as-is, unseen and without contingencies, so research done before the sale is your only protection. This guide covers how to confirm the sale details, check title and liens, estimate value and repairs from the outside and turn it all into a maximum bid.How to Line Up Funds for a Foreclosure AuctionGuide · 7 min readMost foreclosure auctions require payment in cash or certified funds within a short deadline, with no financing contingency. This guide explains common deposit and payment rules, how to show proof of funds, the sources auction buyers use, how to time money between the sale and full payment, and why you need reserves beyond your bid.Auction Day Bidding Strategy for Foreclosure SalesGuide · 6 min readAuction day is where your research turns into a binding purchase, so preparation and discipline matter more than tactics. This guide covers what to do the night before, how bidding works in person and online, how to stick to your maximum and what to do right after you win or lose.After You Win a Foreclosure Auction: Closing, Title and PossessionGuide · 7 min readWinning the bid starts the purchase rather than finishing it. This guide walks through paying the balance, receiving and recording a trustee's or sheriff's deed, getting title insurance after the sale, living with a redemption period, lawfully gaining possession of an occupied home and securing the property once it is yours.

Terms to know

Foreclosure AuctionForeclosure processA foreclosure auction is the public sale of a property after a borrower defaults, where the highest bidder buys it, usually with cash and as-is. If no one outbids the lender, it becomes bank-owned.Notice of Trustee SaleForeclosure processA notice of trustee sale is the public notice, in a non-judicial foreclosure, that sets the date, time and place a trustee will auction a property to repay the defaulted loan.Opening BidForeclosure processAn opening bid is the first bid at a foreclosure auction, usually placed by the lender. Other bidders must exceed it to buy the property; otherwise the lender takes it back.Credit BidForeclosure processA credit bid is a bid at a foreclosure auction that the lender places using the debt it is owed instead of cash. The lender can bid up to the amount of its debt without paying any money.TrusteeForeclosure processIn real estate, a trustee is the neutral third party named in a deed of trust who holds legal title for the lender and can sell the property at a trustee sale if the borrower defaults.Right of RedemptionForeclosure processA right of redemption lets a foreclosed homeowner reclaim the property by paying the full amount owed, either before the foreclosure sale or, in some states, for a set period after it.LienTitle & legalA lien is a legal claim against a property that secures a debt. It must usually be paid off before the property can be sold with clear title, and the creditor can force a sale in some cases.As-Is SaleBuying & closingAn as-is sale means the seller will not make repairs or offer credits for the property's condition. The buyer accepts the home in its current state, though inspection rights and required disclosures may still apply.Cash for KeysForeclosure processCash for keys is a payment a lender or new owner offers to occupants of a foreclosed property in exchange for moving out by a set date and leaving the home in agreed condition, avoiding eviction.Judicial ForeclosureForeclosure processA judicial foreclosure is a foreclosure that goes through the courts: the lender sues the borrower, a judge orders the sale, and the property is auctioned, often by a sheriff or court officer.Title InsuranceBuying & closingTitle insurance protects a buyer or lender against losses from ownership problems that existed before the purchase, such as undisclosed liens, forged documents or recording errors. It is paid once at closing.Title SearchTitle & legalA title search is a review of public records to confirm who legally owns a property and to find any liens, judgments, easements or other claims that could affect ownership.

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Browse upcoming auctions across the country on RealtyTrac, with property details, estimated values and foreclosure status.

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Calculators for this path

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Frequently Asked Questions

Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.