What about buying on the Courthouse Steps?

I'm often asked about buying foreclosure property "at the courthouse steps".  That is buying a property at the actual foreclosure auction.

Now the first thing you need to know is that foreclosures are no longer sold on the courthouse steps like you sometimes see in the movies.  The county clerk no longer comes out in front of the courthouse with a pile of papers and sells a defaulted property to the highest bidder while the owners look on in dismay and disbelief.  

Like most things these days it's done on line. The process is complicated and obscure, except to those doing it as a business.

The second thing you need to know is that this is an area of real estate that's best left to the experts.  If you don't already know in great detail how the system works, you should not even be considering it.  Here's a couple of basic reasons why not.

The bank doing the foreclosing is the entity that gets paid.  If the property is worth less than the face amount of the mortgage (i.e. nearly every foreclosure these days) they will simply buy it from themselves and no one else gets a look in.  In most cases you would have to pay more than the property is actually worth.

You have to pay cash, and there is no refund.

The new buyer is responsible for taxes, liens, HOA fees, code violations and all sorts of stuff.  Also you probably won't get a chance to inspect, before you buy.

You will be up against professionals who do this stuff all day long and will beat the amateurs out every day.

So please, if you are looking for a home or a few good investment properties, forget the courthouse steps.  It will make you crazy, and broke.