Public Foreclosure Auctions

• Foreclosure home auctions can entail government conducted auctions and private lenders' auctions. The federal government lists single-family homes on the HomeSales.gov website that are available for public auction. The public auction site lists previously owned homes that have been foreclosed upon by the U.S. Department of Housing and Urban Development, the U.S. Department of Agriculture and the Department of Veterans Affairs. Although anyone can purchase a government foreclosure property, the federal auction procedures require prospective buyers to obtain licensed real estate agents or brokers to submit their bids.
  
  The federal auction process generally entails open bidding, and bidders can submit their bids for seven days. The government also conducts in-person public auctions on a nationwide basis. The opening bid begins with a minimum bid price, and bids are awarded to the highest bidders.
  
  

Federal Tax Auctions

• The IRS has the authority to seize taxpayers' real property, including their primary residences, vacation homes and any investment properties when taxpayers fail to repay their tax liabilities. The federal income tax laws require the IRS to follow the auction proceedings set forth in the Internal Revenue Code. All delinquent taxpayers must receive an official Notice and Demand for Payment from the IRS before the government can seize their homes.
  
  The federal Internal Revenue Code requires the IRS to provide all taxpayers with at least 180 days to redeem their property after the auction dates. Taxpayers also have a right to redeem their homes by fully repaying their debts before the date of auction. The federal right-of-redemption rules allow taxpayers to reclaim their auctioned property by paying successful bidders their winning auction bids, plus an additional 20 percent of their bids.
  
  

Private Foreclosure Auctions

• In addition to public foreclosures by government agencies, private lenders also conduct their own judicial sales by public auctions. State laws govern the auction procedures that lenders must follow. Most states require lenders to publish their foreclosure sale dates in local newspapers consecutively for a few weeks prior to conducting their auctions. Additionally, some states prohibit lenders from proceeding with foreclosure without obtaining judicial permission. Many other states allow lenders to proceed with nonjudicial foreclosures as long as they provide notice to delinquent homeowners to repay their past due delinquencies before they can exercise their rights-of-redemption. Lenders list their foreclosure properties in local newspapers, with local courts or they may use the Multiple Listing Service and RealtyTrac.
  
  

Considerations

• Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.