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What To Know About Buying At Real Estate Auctions

Monday, April 10th, 2017

Home buyers should consider real estate auctions as a viable means of purchasing a home. Some may be thinking distressed foreclosures are all they can find at an auction, but private firms typically hold more auctions. These firms auction everything from builder closeouts to homes from individual homeowners that want a quick sale. There are four important things potential buyers should know about real estate auctions before bidding.

Understand what type of auction you are attending

Those looking to buy real estate at auction need to be able to distinguish between auctions for foreclosures and privately conducted professional auctions. Attending an auction of a foreclosed home is a legal proceeding. The lenders are foreclosing on a property because of delinquent mortgages, but they are not the original owners of the home. The properties are typically purchased by the lender for the value of their loan.

Use a real estate agent for guidance

Many auction houses will allow you to involve your real estate agent, who will receive a commission on the sale. Your agent will help you determine the true value of the property and compare the house with other properties. The auction house should have a packet of information at the open house with required legal disclosures. Your agent can help you sort through the legal aspects of the sale before the real estate auction begins.

Decide what you are willing to pay before the auction

It is easy for buyers to get caught up in the commotion of bidding and offer more than they can afford. Decide how much you can pay and stick with that amount. Before the real estate auction begins, bidders must present cashier’s or certified checks for a certain amount. The checks are often worth several thousand dollars. Sellers are more than willing to give the bidder a good value, but they must bring something to prove they are making a real offer.

Understand that the sale price is not the entire price

The sale price of the home is not actually the entire price you will pay at auction. The auctioneer will collect taxes and fees that go along with every property sale. The costs are paid to the auction house or real estate agents involved. It is important for buyers to get approved for a mortgage beforehand, since the sale will close within 30 to 45 days of the auction.

If you would like to learn more about attending a real estate auction, contact the experts at High Plains Auctioneers today. You can call us at (806) 244-6776 or Contact Us by email for more information. Don’t forget to check out our Upcoming Auctions to see what we have available!