What Happens at a Foreclosure Auction in Fargo?

What Happens at a Foreclosure Auction in Fargo?

Foreclosure Auction

What happens at a foreclosure auction in Fargo, ND? And how much time do you have before that happens?

We’ve explained the exact steps of the foreclosure process in a previous article, but we’ll review it right now to give you a quick summary:

  1. Delinquency on your mortgage payments for 3-6 months.
  2. The bank sends you a “Notice of Default,” saying that they’re going to take legal action if you don’t make an effort to make a payment.
  3. If you don’t do anything, the bank forecloses.
  4. The bank will then put your house up for sale in a public auction, posted in the county recorder’s office. The bank will send you a “Notice of Public Auction Sale.” That notice lets you know when and where they’re going to hold the auction.
  5. If your house doesn’t sell at auction, the bank hires a realty agency and they market it as an REO.

So, if you’ve just received a “Notice of Default,” you have at least a few months to sort everything out. In that time, you could talk to your lender and even try for a short sale.

How Does a Public Auction Work for Foreclosed Properties?

If you know that you’re delinquent on your payments and you have no other options, the bank will put your house up for auction, to sell it to the highest bidder. Some websites, like Auction.com, will track these auctions. They give you important information, like when and where they’re holding the auction, whether it’s in person or online, and even title and property information.

If you’re interested in buying a foreclosure, make sure to do your due diligence. Foreclosures can be great deals, but they’re typically properties in need of lots of repairs, so you’ll need to do some fixing up before you put it back on the market.

What Happens at the Foreclosure Auction?

In order for someone to buy your house at a public auction, they need at least enough cash to cover the remaining amount on the mortgage. 

In order to even qualify for the auction, then, most of the time the bidder needs to prove that they have enough cash for a serious bid. This is called “proof of funds,” and it’s typically about 5-10% of a property’s selling price.

The auction works just like any auction. If it’s online, it’s pretty similar to buying a product on eBay. You’ll put in a price that you’re willing to pay, and if no one bids higher than that price, your bid wins. The same general rules apply to in-person auctions, but since each bank has its own trustee that usually holds the auctions, the exact rules and regulations may differ.

What Fees are Associated with Buying a House at Foreclosure?

The process of buying a house at foreclosure is a lot like the process of buying a house in a more traditional manner, but you might also run into some fees that you otherwise wouldn’t.

For example, it’s possible there are other claims or liens against the property from previous contractors or debt collectors. Before you buy the property, you should search for these liens and do everything you can to make sure the property has a clean title. Even then, you should purchase title insurance just in case a contractor pops out of nowhere demanding payment. Additionally, there may be any number of maintenance issues that you’ll have to pay for out of pocket.

Finally, it’s likely that there’s someone still living in the house, whether it’s the previous tenant or a squatter, and you’ll have to pay to evict them.

Can I Get My House Back After a Foreclosure Auction?

Yes, but it’s going to cost you. If you recently ran into a bunch of money through some sort of inheritance or other unexpected windfall, you’re in luck. You might be able to avoid foreclosure and eviction entirely.

There’s a period after the auction called the “right of redemption.” You’ll have to reimburse the person who purchased your home with the full amount plus any other expenses, but it is technically possible for you to get your home back.

Where Can I Find Foreclosure Auctions in Fargo?

As we mentioned before, check Auction.com and search for properties in Fargo to get some details.

Additionally, you can check the Cass County Recorder’s office for any recent notices of default or, eventually, notices of public auction. They’ll turn up on auction sites eventually, since sometimes those are the trustees that the bank hires to host the auction in the first place.

Conclusion: What Happens at a Foreclosure Auction in Fargo?

At a foreclosure auction in Fargo (and everywhere), the house goes to the highest bidder. The bank will hire a trustee to hold the auction either online or in a public space, like at the county courthouse or a hotel conference room. In order to qualify to be at the auction, bidders have to put down a refundable deposit of about 5-10% of the expected selling price.

Then, for the person who won the bid, the work is just beginning. They’ll have to pay for title insurance and do their due diligence to make sure there are no liens or claims against the deed. Additionally, they’ll probably have to evict the current tenant or any squatters.

If your house was just sold at auction, you have some time to buy it back — but you’ll need to match 100% of the bidder’s final price, plus any additional costs.

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