Real Estate Auctions – Knowing When to Bid at Real Estate Auctions

For prospective homeowners, the thought of spending millions of thousands of dollars on new real estate construction can seem daunting. The alternative is to buy a house at auction. Real estate auctions are set up by the lender to relieve the bank of the lien of the real estate property that has been repossessed. If the bank is unable to sell the foreclosure at a price it deems appropriate, it will put the property up for public auction.

Public real estate auctions are tricky, since the lender doesn’t have to sell the house, even if the bids are relatively high. The lender has full control of the title to the home and can choose whether or not to accept the highest bid during the auction. If the lender does not accept the offer, the auction will be in vain and the lender will retain ownership of the real property despite the auction.

For those trying to buy a home through a real estate auction, it’s best to be prepared for the home sale from the moment you step foot on the property. There are five things every potential buyer should do to prepare for a real estate auction.

o Get all the information. Many real estate auctions will require the homebuyer to present some type of deposit or proof of lender approval at the time of sale. If the lender accepts the price, and often a representative of the lender will be at the auction site, the buyer will need to show that he or she has the financial means to pay for the home. The required initial deposit or proof of immediate lender approval is always a great item to have on hand.

o Have a drink or two. By walking through the house before the auction begins. Take some pictures of any and all imperfections in the house. Be sure to look beyond the physical dings and scratches to the home’s surface. Camera in hand, you’re looking for things that could cost a lot of dollars to fix, not just a coat of paint.

o Check comps. Before heading to the real estate auction, be sure to check the prices of comparable homes in the area. If homes in the area sell for $150,000 and the bid on this home reaches that point, there is no point in buying this home at auction. Real estate auctions are often held on homes that are dilapidated and in need of repair. If a house in good condition sells for the same price as the auction for this house, you may find a better offer.

Real estate auctions are a quick and easy way to save thousands of dollars on the sale price of your home. When you come to an auction with the real idea of ​​buying a home, you should be prepared for the possibility that our offer may actually be the chosen one. Getting pre-approved for a home loan, touring the house for potential high-priced fixes, and comparing the house to houses in the area are the best ways to stay on top when the sledgehammer hits the podium.