Navigating New York’s Evolving Foreclosure Auction Landscape: Your Guide to Online Bidding and Essential Requirements

New York’s foreclosure auction system has undergone significant transformation in 2024, introducing new technologies and streamlined processes that make property acquisition more accessible than ever before. Whether you’re an investor seeking distressed properties or a buyer looking for opportunities below market value, understanding the current auction landscape is crucial for success.

The Foundation of New York Foreclosure Auctions

In a foreclosure action, the judgment of foreclosure directs that the mortgaged premises be sold at auction to pay the sum due to the foreclosing plaintiff. New York is one of the few states that uses what’s called a judicial foreclosure process. That means every foreclosure must go through the court system. This judicial process provides additional protections for all parties involved while creating a transparent public record of proceedings.

Foreclosure auctions take place on Wednesday afternoons at 2:00 p.m. on the Portico at 60 Centre Street in Manhattan, while Foreclosure Auctions will be held every Thursday in room 224 at 2:30PM in Kings County (Brooklyn). Each county maintains its own schedule and specific procedures, making location-specific research essential.

Revolutionary Online Bidding Platforms

The most significant development in 2024 has been the expansion of remote bidding capabilities. Pursuant to Administrative Order 150/25, remote bidding is now authorized in all 62 counties with the consent of the appropriate local Administrative Judge. With remote bidding, individuals may place bids on properties during live foreclosure sales through remote third-party auction platforms, concurrently with in-person bidders.

Currently, remote bidding is authorized in the following counties: Albany, Bronx, Monroe, Nassau, Niagara, Queens, Rockland, and Saratoga. This expansion represents a major shift from the traditional courthouse-only auction model that has dominated New York for decades.

Auction.com is the nation’s largest online marketplace for foreclosure and bank-owned real estate auctions. The platform has adapted to New York’s unique requirements, offering Remote Bid is now available on select properties in New York, with plans to expand soon. Simply search and filter “Foreclosure Homes” and buying type “Remote Bid” to see what is available and enjoy the convenience of bidding without courthouse visits.

Critical Buyer Requirements and Financial Obligations

Understanding deposit requirements is fundamental to successful participation. A successful bidder must have in his/her possession at the time of the bid the full 10% of the sum bid, in cash (if accepted at the referee’s discretion) or certified or bank check to be made payable to the Referee. No sale will be deemed final until the full 10% deposit has been paid to the Referee and the Terms of Sale have been signed; this must be done immediately following the auction.

For online bidders, New York Foreclosure auctions have a 10% Winning Bid Deposit requirement due at the time of being declared the winning bidder on any property. The 10% deposit is determined by the winning bid amount. The buyer is required to pay the deposit immediately upon winning. This immediate payment requirement eliminates the traditional grace period found in conventional real estate transactions.

Registration requirements have also evolved. All persons wishing to bid on properties must register with the Referee and provide proof of identification. Bidders will be required to stand and state their names at the time the bid is made. This transparency measure helps prevent fraudulent bidding while maintaining auction integrity.

Understanding the Auction Process

The auction process follows a structured format that buyers must understand. The Referee will first read (out loud) the Judgment of Foreclosure. Then, based on the actual amount owed to the lender as reflected in the Judgment, he will request an opening bid. Third parties will now bid above the lender’s “upset price” of $300,000.00 (usually bidding is in increments of $1,000.00), and the winning bid in this case may be $350,000.00.

Properties are sold “as-is” with no warranties or representations about condition. A purchaser accepts a foreclosed property in “as-is” condition. More often than not, there is no opportunity to view the interior of the property prior to the foreclosure sale. This reality requires buyers to conduct thorough external inspections and research before bidding.

Post-Auction Obligations and Closing Requirements

Winning bidders face strict timelines for completing their purchase. The closing on the property needs to take place 30 days after the auction. However, the highest bidder often gets time extensions from the Referee. A purchaser must generally give the Referee a 10% deposit at the sale and be able to close within 30 days.

Failure to meet these obligations carries serious consequences. If the high bidder is unwilling to close or unable to obtain the balance needed to close the sale, their bid is forfeited, and the sale is voided. When this happens, a new auction needs to be scheduled. Bidders are cautioned that the failure to furnish the 10% deposit or sign the Terms of Sale after winning an auction may result in the loss of future bidding privileges.

The Importance of Professional Legal Guidance

Given the complexity and high stakes involved in foreclosure auctions, professional legal assistance is invaluable. Prior to the auction date, it is wise for potential bidders to have experienced counsel review the terms of sale. A bidder at sale should not assume that the foreclosing attorney did everything necessary to clear title. For example, all judgment holders and subordinate mortgage holders should be named as defendants in the foreclosure action so that those liens are wiped out by the action.

For those facing foreclosure themselves, understanding the Foreclosure Auction process becomes even more critical. The Law Offices of Ronald D. Weiss, PC, located on Long Island, has been providing expert foreclosure defense services since 1993. The Law Offices of Ronald D. Weiss, PC have been supplying expert bankruptcy, foreclosure defense, and debt negotiation services since 1993. We offer practical, compassionate solutions customized to each client’s financial situation. With over 30 legal professionals on our team, we have the resources to handle your important legal matter.

Preparing for Success in 2024 and Beyond

Success in New York’s foreclosure auction market requires preparation, understanding, and often professional guidance. The introduction of remote bidding has democratized access to these auctions, but the fundamental requirements and risks remain unchanged. Whether participating in-person at the courthouse or remotely through approved platforms, bidders must be prepared with proper identification, immediate access to the full deposit amount, and a clear understanding of the property’s condition and legal status.

As New York’s foreclosure auction system continues to evolve with technology, the opportunities for both investors and homebuyers will likely expand. However, the judicial nature of New York’s foreclosure process means that thorough preparation and professional guidance remain essential components of successful participation in this specialized real estate market.