While there is a little more risk when you buy a house through a real-estate auction, you can usually balance this out by paying a price for the house that is lower than the current market value. Real-estate auctions are often used for homes that have been foreclosed or for homeowners that are using short sales, and you can benefit from this type of sale if you follow these three tips.
Know What You're Buying
Before you buy a house at a real-estate auction, find out if you can view it. Some auction companies may allow this, but others may not. If they do allow it, you may have to come and see the house before the auction takes place, but this will depend on the auction company.
When a house ends up at an auction, it is likely because the homeowner ran into financial problems. Because of this, the homeowner may have neglected the house, leaving it with some problems. Viewing the house is a great way to find out if there are issues. As long as you know about any problems, you can plan on spending money to fix them, and you could factor this in when you bid on the house.
Know The Market
It's also important for you to know the going price of a house before you bid. If you are not sure what a house is worth, you will have no idea whether or not you are getting a good deal on the property.
If you bid on a house for a certain price and later find out that the price is higher than the value, you may end up with problems getting a loan for the property.
Bring The Right Amount Of Money
Finally, when you purchase a house through an auction, you will need to have money down. Many auction companies require this in the form of a cashier's check, but this varies. If you are really serious about buying a house through an auction, you should call the auction company ahead of time. When you place this call, ask them:
- How much money to bring
- What forms of payment they accept
- If you can view the house
- How the bidding process works
- Who will pay for any needed repairs
Buying a house through a real-estate auction is a great way to get a good deal on a house, but you should not go through with this without understanding how auctions work. To learn more about upcoming real-estate auctions, contact a professional auction company, like Metro Appraisal Associates.