Home and Property Auctions: What to Know

Home and Property Auctions: What to Know

Buying a home is absolutely everyone’s dream, when we look into the reality of this it will come to be the biggest expense of our lives. That’s why as a property investor we have to think outside the box. We are traditionally accustomed to score off the market for homes, or attend open houses and going on neighborhood tours. Sellers, on the other hand, typically work with real estate agents to sell their property to potential buyers. That’s why in this article we are going to go through some alternative ways to buy a home

Benefits Of Buying A Home Through An Auction 

The biggest benefit from buying a home Real Estate Property Auctions is the savings. Lenders want to sell these properties as quickly as possible because they are losing money by having non-performing assets on their books. Technically speaking this means that the property is not producing any mortgage payments. It’s just sitting there costing them money in the form of upkeep and marketing. For this, their number one objective is to sell the home as fast as possible; it is a money loser for them. 

Live Auctions 

Although online auctions are extremely popular, live auctions are still very much a thing. Typically held in the county courthouse live auctions require you to show up in person. Sometimes though, real estate auctions take place right on the property. These auctions are open to anyone interested in attending. Registration is needed if you are interested in bidding. Before visiting an auction be warned each auction has its own set of rules and requirements. 

Auction Offerings 

Foreclosure auctions are the type of auction that forces the owner to sell in order to pay past-due mortgages. State or county in tax auctions offers government confiscated properties for them to sell to recover taxes. Other property sellers contact an Auction Company directly and sign an auction sales agreement, typically to avoid buyer negotiations. Most Sellers set a minimum price for the property also known as property reserve. Some auctions offer the house as an absolute auction without any minimum sales prices. Even though there are some cautious buyers and some sellers who are hesitant there are advantages for both buyers and sellers interested in an auctioned property. As a seller, real estate auctions are more affordable giving you the opportunity to show your property to multiple interested buyers at once and as a buyer there is no need to worry, for the transparency of an auctioned home is as if buying from a store. 

What Are The Downsides To Buying An Auction? 

There is no cooling off for when you buy at an auction. In short this means that if you win the auction you are obliged to purchase the property off the vendor for the price you placed. You want to make sure that you have completed a building inspection before the auction if you do intend to buy. You can’t make any contract adjustments it is as it is on the day of the sell. So make sure you have a home loan pre-approval before bidding at an auction. 

 

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