Another advanced tactic the pros use is to buy the worthless second mortgages for a few cents on the dollar. These liens are transferred to the pros at full face value so the pro will pay perhaps $500 for a $25,000 lien. Now the pro has a "bid credit" of $25,000. When the bidding starts the pro starts bidding to pull in newbies from the crowd and can continue bidding for $25,000 without it costing him any money other than the $500 he paid for the second mortgage (lien). Here is where it really gets going - the pro keeps aggressively bidding until the competitor, usually a newbie, quits (i.e. $20,000) and the pro reneges on his last bid. The newbie now owns the property at $20,000 over the first mortgage amount due and the pro has turned $500 into $20,000 with his only risk being his original $500.

The pro uses "shill" bidders so if he has to renege he doesn’t get barred from the future sales. There are many other tricks of the trade that the pros use, so if you decide to buy a property at the foreclosure auction you better beware of the hazards. Also find out ahead of time what additional costs the county charges such as auctions fees, title transfer, document stamps, etc. so you aren’t surprised at how much money you need for the final purchase amount. Good luck and good bidding!

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