Do you want to find the best home? Rather than look at real estate listings, try property auctions.
Are you looking to purchase a property? You don’t have to buy a home the traditional way by using a realtor, looking at a lot of open houses or going back and forth with a seller.
Going to property auctions is a great way to get a home for a less expensive price point and see a few different houses at once.
Let’s take a look at everything you need to know about auctions for properties.
What Are Property Auctions?
Auctions are put on by real estate agents. It’s a large public sale of residential properties.
Any individual is able to attend an auction and purchase a property. It’s not just for real estate agents or investors.
The Different Kinds of Auctions
When it comes to property auctions, there are several different types you can attend to find a home for purchase. Each of these auctions varies based on pricing and payments.
The first type of auction is a Reserve Auction. In this type of auction, the lender is able to decline your offer. They place a reserve price, or a price they aren’t willing to go beneath, and it is a secret from the bidders. Even if you place the highest bid, if it is lower than the reserve price, your offer may be rejected.
The second type of auction is an Absolute Auction. This type of auction awards the highest bidder with the property. There is no reserve price.
The third type of auction is a Minimum-bid Auction. Similar to a reserve auction where a minimum is set for awarding a bid, this type of auction also sets a minimum. This minimum is set on where the bidding must begin instead of a threshold for which offers will be accepted.
The fourth and final type of auction is a Foreclosure Auction. During a foreclosure auction, the lender doesn’t receive profit from the purchase. This type of auction is where you’ll most likely find the best price for a property.
Finding a House
If property auctions sound like a good fit for you to find your home, it’s time to start looking for places to find these auctions.
Auctioned houses will list online and found through a quick Google search, or in your local newspaper. Real estate agents may also have a list of auctioned houses and timelines for when they will auction off.
Paying for a House
Bidding on a home at an auction is a little different than buying a house through a real estate agent. When you bid on a home at an auction, you need to be prepared to pay for it right then and there.
Having a cashier’s check with you is needed to finalize the purchase. The cashier’s check doesn’t need to be for the entire amount, just the starting price. Auction listings will have this information about eh price.
Once you’ve presented the cashier’s check, you’ll go through a property closing process.
Check for Liens
An important thing to note when going to property auctions and bidding on auctioned homes is to check for liens.
If there are liens on the home, where the previous owner owes money on it, make sure you’re aware of this. Make sure you’re also aware of any maintenance issues in the home that need to be addressed.
All in all, if you’re looking for a great deal on a home, an auction is the place to go. While the home may not be perfect or in great shape, if you like a fixer-upper, you’ll be happy with your decision.
To learn more about auctions, read our blog today.