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How To Prepare For A Real Estate Auction

Thursday, March 10th, 2016

If you have decided you want to purchase a new home at auction, it is important to know how to prepare for a real estate auction. First you must know how to find a real estate auction and how to confirm the auction status and location. Next, confirm if there are specific bidding procedures used by the auction house and research the market value of the real estate being auctioned. Finally, find out how much you can bid at the real estate auction to get the best deal possible.

Finding a real estate auction

Stay updated on auction information so you are able to act quickly when homes go up for sale. You will want to set up a system where you can track properties that are of interest to you. When you find a home that you are interested in, look at its condition and what type of neighborhood it is located in. It may be possible to meet the owner of the real estate and even work out a last minute deal before the property is sold at auction. You could also meet with neighbors, who can often give you more information.

Confirm the auction status

Many times after an auction has been scheduled, the owner is still given a chance to stop it. The real estate auction can even be postponed without a future date given. The cancellation or postponement should be published. You can also contact the trustee to find out if the event is still on track or call the auction house conducting the event.

Know the location of the real estate auction

Most real estate auctions occur in the same county where the property is or on the property itself. If the location is not listed for some reason, you can usually get the information from the county clerk or the auction house.

Confirm the bidding procedures for the real estate auction

The bidding process can be different in various states. You should know your state’s policy on bidding before attending the auction. Some states require you to have the full amount of what you expect to bid in the form of cash or cashier’s check. Other states require bidders to bring a certain percentage of the bid amount to the auction and then agree to certain time frame to pay the remainder. There are also state foreclosure laws you should educate yourself with before attending the auction.

Research the market value of the real estate

You will want to know the estimated market value of the property before bidding on it. Another important factor to research is whether or not there are any liens against the property. The county recorder can help you with this information, as it is considered public information. In some states, if there are liens against the real estate, the winning bidder assumes those responsibilities.

Find out how much you can bid at the real estate auction

After gathering all of the information, determine what the potential bargain will be and what your financial capabilities are. Then, figure out what you should bid at the auction. By setting a specific amount, you can avoid getting caught up in the action and bidding too much. A reasonable purchase would be 20 percent below the estimated market value of the real estate.

When a property ends up at an auction, it generally means the owner was having financial troubles. The owner may have fallen behind on maintenance or have liens such as tax liens, contractor liens, or even a second mortgage on the property. The auction house conducting the event should be able to help you find out about these types of situations.

If you cannot afford to fix a property, avoid bidding on the ones that do not allow inspections prior to auction day. There are some auctions that do not allow viewing of the property until it is won. You want to make sure you win a property you can afford to fix if repairs are needed.

There are also some cases where the previous owner is allowed to remain on the property until new ownership takes over. In these cases, these people must be evicted, which is often unpleasant and sometimes costly.

Purchasing property at a real estate auction can be fun and financially beneficial, but it is important to educate yourself before you go to auction. Talk to the auction house conducting the sale to learn as much as you can and follow the above tips to make sure you are prepared.

If you would like to learn more about real estate auctions, contact the experts at High Plains Auctioneers. Call us today at (806) 244-6776 or Contact Us by email for more information about our services. Don’t forget to view our upcoming auctions to see what we currently have available.