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Sunday, 15 December 2019
Agent Resource Center
Agent Resource Center

Buying a Home at property Auction

Written by Posted On Friday, 11 October 2019 06:42

Buying a home is a significant investment. In fact, if you are an average person, it is the biggest transactions you will ever make. But what if there was a way to minimize that expense, and save a fortune on your dream home? Well, say hello to home auctions.

 

If you are interested in purchasing a house for investment or personal use, the local MLS is not your only option. Today, you can get the home through a real estate auction. In case you didn’t know, top investors in the market acquire properties this way. But technology has enhanced the process further, making it a little bit challenging for new investors. That doesn’t mean that it is impossible for those making an entry – far from it. The only catch is for you to be thorough with your research and ensure that you understand the nuances that go into the process.

Types of properties sold at auction                                

Any property can be sold at an auction. However, the most common auction is foreclosures. Based on where you live, an officer of the court or the lender performs a foreclosure sale to recoup the loan balance from the homeowner who failed to make mortgage payments.

It’s important to note that real estate auctions can either be online or in-person. But thanks to technology, the trend is shifting more to the online side as people are getting more comfortable purchasing things virtually. Irrespective of how you choose to buy your home, always keep in mind that it can be complicated, but when done successfully, it can be rewarding.

Here are some reasons to buy your home at a property auction

Enjoy the best prices

 One of the main reasons to get your property at an auction is the price. Since it’s about bidding, there’s a potential for great prices. Contrary to what most people assume, not all home auctions have a reserve. And those that don’t have a reserve are your opportunity for getting the best deal. Don’t be scared of the unknown – approach the process with courage, or let an expert help out. In the end, you will find something for you at the best price.

You win, the home is yours

Another great reason to get your property in an auction is that they are a quick sale. As long as you are the highest bidder, the home becomes yours. Once the bank or an appointed company sets the date of auction and the reserve, and you win the bid, you’ll only need to cover a certain percentage of the property on the spot and close within 30 days.

Cash financing  

If you cash with you, an auction can be the best bet. Many homebuyers will be locked out of an auction because they can only afford to buy a home through a mortgage. Once you win the bid, you will have to pay a minimum of 10% of the property price as a deposit and complete the rest within 30 days.

Quick tips

Before you go into an auction, you should make a point of searching for the property in person. To find the best deal, you will need to go to different auctions. Be sure to check foreclosure information in the area of interest to find out the auction that will be selling the property you’re interested in. A local real estate agent can be beneficial – though they won’t get a commission from a live auction sale.

As mentioned above, you should check the property yourself. Although you won’t be able to go inside of the property, you can tell a lot about it by checking how it looks like from outside. Keep in mind that the foreclosed person lost the house because of financial constraints, so it’s highly likely that they didn’t keep up with maintenance. Again, the lender has never lived in the house, so they know very little about potential issues.

It’s also a good idea to learn everything you can about the house before you purchase it. Find out about the amount that the previous owner owed the estimated market value of the property as well as other pertinent aspects.

Have a lawyer look into the possibility of liens before bidding. Otherwise, you could end up with the responsibility of paying for the lien.

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Ashley Mills

This is Ashley a blogger and independent freelance journalist. Working as an independent media consultant since 2006. I've contributed a lot of news articles, ideas, inventions and more on various online weblogs.

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