Wes Mazurek writes a monthly column for the Kalamazoo Gazette regarding real estate auctions. This article is an expanded version of the January 4, 2001 column.

Q. I am of the understanding that if I purchase a home at auction I have to pay cash for the home that day. Is this true?

A. Not true. The purchasing process for an auction property is no different than purchasing a home the conventional way. You will need to put down an earnest deposit, same as with the conventional method. Earnest deposits are also called "Good Faith Monies". Earnest deposits vary, depending on the price of the home, and will be applied to the mortgage. Pre-approval is a must. The auction purchase is not contingent on the buyer getting financing after the sale; financing must be in place before your auction purchase. Typically, the lender will ask to see a copy of the purchase agreement. You will not have one at this point because you have not yet purchased the home, but the lender can call the Auctioneer and receive a package on the home that will contain the necessary information in order to get started on your mortgage.

When talking with your lender about your mortgage, the following information is needed at your application:

1. Driver's License, Social Security Numbers or other ID.
   
2. Residence Address - past 2 years, including landlords.
   
3. Name and Address of each employer and W-2s for the past two years.
   
4. Complete tax returns if self employed.
   
5. Gross Monthly Salary & Current Pay Stubs for the past 30 days.
   
6. Names, Addresses, Account #'s, Balances of all Checking & Savings Accounts.
   
7. Names, Addresses, Account #'s, Balances and Monthly Payments of all Open Loans and Creditors.
   
8. Address & Loan information of other real estate you own.
   
9. Estimated value of Furniture and Personal Property.
   
10. Divorce Decree, if applicable.

If you are in a position where paying cash is feasible, then all you have to do is verify your funds through your bank. This is typically done with a verification letter. We do not need to see how much money you have in your account-only verification that funds are available to make the purchase.

Our goal is to assist you in making your purchase. We, as a real estate and auction company, will do all we can to make the process as easy and as painless as possible. If you ever have any questions, as always feel free to call us.

Most, if not all lenders will assist you in establishing a mortgage program that best fits your needs. The FHA mortgage program typically will not support an auction purchase as auction properties are sold "as is, where is ". More homes are being sold via the auction method and there are some great opportunities available to qualified buyers. Come Prepared! We'll see you at the auction.

Auction does not always mean distressed, foreclosed on, or bankrupted. By becoming an informed buyer you will be able to take advantage of quality real estate opportunities available through the auction method. Be a prepared buyer, we'll see you at the auction.

Email to Wes@DreamHomeAuctions.com