What Types of Properties Can I Buy at Auction?

There are many types of properties that you can bid on in an auction. These include bank-owned, non-bank owned, CWCOT (Claims Without Conveyance of Title, which is also known as second chance foreclosure), short sale, and foreclosure trustee properties. Take a look at each type of property and learn about the benefits of each one.   

Bank-owned properties 

Bank-owned properties (also referred to as real estate owned, orREO) are owned by a lending institution and often sold throughauctions with the assistance of a real estate agent.These properties have gone through theforeclosure process, failed to find a buyer during the foreclosure auction event, and arere-valued at an amount acceptable to the lending institution but that also encourages a sale.

These kinds of properties are often sold “as is,” which can be great for buyers.The lending institution wants a hassle-free process and is motivated to make a quick, seamless sale. 

Learn more about bank owned properties.   

Non-bank owned properties

Non-bank owned properties are available for purchase at an auction and are not owned by a bank or lender.The bank or lender has not assumed ownership, and the seller is looking for a buyer.

Non-bank owned properties are typically retail properties that are listed through the auction platform. They could be listed by investors, or it could be a realtor working with owners who have opted to put the property on auction. 

Learn more about non-bank owned properties. 

Second chance foreclosure (CWCOT) properties 

Also referred to as Claims Without Conveyance of Title (CWCOT), this program givesbuyers a chance to purchase HUD-backed, cash-only foreclosure properties through online auctions.

These cash-only properties usually close quickly and are offered below the appraised value. Second chance foreclosure properties can be a great value for investors because they are frequently being sold at greater discount and buyers do not have to pay a buyer’s premium (which is often the greater of 5% of the purchase price or $2,500). But it is important to remember that they are sold in“as is”condition, as occupied, and without warranties. 

Learn more about second chance foreclosure (CWCOT) properties.  

Foreclosure properties 

These are properties overseen by an attorney or a neutral third party called a foreclosure trustee who handles the foreclosure process.Depending on state law, a trustee might be an individual, like an attorney, or a business entity, like a bank or a title company. 

There are certain states in which you can bid on foreclosure auctions online, but most are held live at in-person locations. These locations and auction times are posted in advance and will vary by state.

These types of properties can be great for buyers who are looking for a deal, as they are often priced at auction to cover only what is owed on the property.  

Learn more about foreclosure properties.  

Short sale properties 

A short sale is a property being sold at a price that is an amount lower than what the seller owes on the mortgage. The lender reviews and approves purchase offers on these properties.This kind of sale often occurs when the seller is under financial distress and is unable to continue paying the mortgageloan.  
In this case, the seller will sell the property to a third party and use theproceedsto pay the lender.

Learn more about short sale properties. 


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Find out how the lifecycle of an auction works and tips to help guide you every step of the way.


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