Auction Laws Related to Foreclosures
Auctions are regulated by state laws, and these generally state that a home can be auctioned off 90 days to 12 months after a Notice of Default or Lis Pendens has been delivered to the homeowner warning them of repossession. In all states, the place, time and date of the auction must be publicly announced, so you can often find out about these auctions through newspaper notices or through notices posted in the local courthouse.
Auctions are designed to help the lender quickly sell distressed properties, and for this reason the starting price on properties sold at auction tends to be low. However, since auctions draw many investors and buyers, the starting prices do not always remain low. It is a good idea to have a property well inspected before you arrive at an auction. That way, you can set a bid limit for yourself to ensure that you do not overpay for a property.