When Victor decided to start investing on the side in the hopes of supplementing the income he received from United Airlines, he called me up to ask where he could find cheap investment property. His time and resources were limited, so it was critical that he only go after what he had a good chance of getting but that he doesn’t have to pay through the nose for it. I laughed and told him that was every real estate investor’s goal, even mine. None of us like to feel that we’re spinning our wheels even if we can, technically, afford to do so.

Still, I was willing to give him some pointers. So, I started by recommending that he avoid buying from a Chicago foreclosure auction until he became a more seasoned investor and only if he couldn’t find better opportunities elsewhere. Of course, that opened up a whole can of worms since another investor had advised that he do just the opposite. The only way to really settle the matter was to review the auctions’ fine print, scrutinize the process, and, honestly, let Victor decide for himself if foreclosure auctions offered the best deals. And, that’s what we did.

foreclosure auction chicago

Do Chicago Foreclosure Auctions Offer the Best Investment Deals?

The one advantage to buying properties from foreclosure auctions is the possibility of acquiring fixer-uppers at a price that is so far below market value that, once rehabbed, will produce potentially sizeable returns. It’s why Victor was advised to use auctions as an efficient way to build his property portfolio and why you may be thinking of doing the same. And, this argument is not entirely unsound. When you think about the number of homes that have been foreclosed on in Chicago through the years and how most banks simply hope to recoup even a fraction of their costs, it stands to reason that a lot of cheap homes can be found at local auctions.

But, if you’ll hear me out, you’ll see that even when seemingly good deals are being sold at auction, you could be shooting yourself in the foot—and, in your profits—by trying to get a hold of one. In the end, like Victor, I’ll let you decide. In the meantime, here’s what you need to know about purchasing property from the Windy City’s two foreclosure auctions as well as a suggestion on how to improve your chances of finding, and buying, better real estate investments.

Cook County Sheriff’s Sale

About 10% of foreclosed homes in Chicago are sold at the Cook County Sheriff’s Sale. So, though you won’t find the biggest selection of foreclosure auction homes here, you will find some. Sale dates and times are requested by the foreclosing lenders and often vary from one week to the next, so it’s always good to check the sheriff’s website for details. There, you’ll also find the terms of sale. The long and short of it, however, is that your 10% deposit, in the form of a certified check, is due at the time of registration and, if you win, the balance is due a mere 24 hours later. Failure to pay equals forfeiture of your funds. So, before you ever bid, make sure you want to buy.

Of course, that’s easier said than done. You won’t be granted access to confirm the house is vacant or to work in a home inspection. And, if you end up having to evict non-paying tenants or renovate a major fixer, your cheap find may start to look like an expensive trick. Unfortunately, since court approval is required on all foreclosure auction sales, you may not even know what you have for several weeks or months after the auctioneer yells, ‘sold!’ That puts you at a disadvantage if, by the time you get the keys, you’ve also got a Chicago winter moving in on your renovation timeline—and, your potential profits.

The Judicial Sales Corporation

The remaining 90% of Chicago homes in foreclosure are sold by the Judicial Sales Corporation (TJSC). Auctions happen daily and almost everything you need to know about the properties being sold, like opening bids and minimum deposit amounts, can be found online. And, since last-minute cancellations are a regular occurrence, checking online for updates should happen regularly, too. Unfortunately, what you won’t find on TJSC’s website is anything about the condition of the property, whether or not it’s occupied, or if there are any unpaid taxes or liens that you could inherit. You will not be given the time to find out, either.

After paying the deposit of up to 25% at the time of registration, you’re expected to pay the balance by 2:00 p.m. the next day if you win. That leaves little time to inspect the property if you were allowed to, which you aren’t. You also aren’t allowed to back out of the sale. Should you still try, you’ll lose your deposit and gain possible penalties. The need for court approval applies to homes sold at this auction, too. So, your sweet deal may not feel so enticing months later once you finally get inside.

But, this is all predicated on you winning the property in the first place. Investor competition can be fierce for these homes, but you’ll be bidding against lenders as well. With so many chances to lose your shirt and waste your time, it’s about 90% certain you can find a better way to locate the best deals than trying to buy investment property from this real estate auction.

An Alternative to Chicago Foreclosure Auctions: Homeowners in Pre-foreclosure

There are more distressed homeowners who are struggling to pay their mortgages in the Windy City than there are foreclosure auction homes available through the Cook County Sheriff’s Sale or the Judicial Sales Corporation. These individuals and families, many of whom have already received a default notice from their lender, are some of the most motivated sellers of some of the best investment deals you will ever find. When they know they still have the opportunity to keep a bad situation from getting worse by selling to you, they often jump at the chance. And, their reason is sound; they get to avoid having a foreclosure on their record and you get a property that poses less risk to invest in since you can perform your due diligence, conduct a home inspection, and run the numbers—all of which you cannot do, or won’t have time to do, when you buy a house from a foreclosure auction. Also, the average time it takes to complete the foreclosure process still hovers around two years, according to ATTOM Data Solutions’ Foreclosure Market Report. That gives you plenty of time to find these homeowners or to encourage them to find you.

So, which strategy for finding distressed homeowner leads offers the best opportunity for real estate investments? One of the most well known, of course.

Your Best Option for Buying Homes Pre-foreclosure

By the time I started investing in real estate, I’d already been warned about the potential pitfalls of buying property from a foreclosure auction. And, no, I didn’t listen. But, after spinning my wheels several times with nothing to show for it except exasperation, I set about trying to reach homeowners in pre-foreclosure directly by the usual methods, like purchasing lead lists. After a while, however, I thought there had to be a better way to reach distressed homeowners. It turns out there is—if you’re an independently owned and operated HomeVestors® franchisee.

See, if you become a HomeVestors® franchisee like I did years ago, you’ll have access to the best marketing tools and resources available to real estate investors today. This includes the nationally-known and trusted “We Buy Ugly Houses®” national ad campaign that connects homeowners in trouble with franchisees in their area. They generally call after seeing a commercial or driving past a billboard. As far as marketing campaigns that drive good leads to you go, there is nothing else like it. And, for helping Chicago homeowners avoid foreclosure, it also can’t be beat.

Once you decide, like Victor, that you want access to some of the best real estate leads, call HomeVestors®.


Each franchise office is independently owned and operated.


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