There is no more cost effective way to purchase a home than through an auction. Over the last decade, real estate has become a hot item up for bid at auction houses and through online auction platforms. When a bank forecloses on a home, you have a unique opportunity to find a diamond in the rough. Real estate owned (REO) properties, unlike privately owned homes, must sell when they’re at auction. There can be a tremendous upside if you know how to prepare for the auction, and learn how to bid strategically. Do your homework before you buy a home at auction!
Complete an Inspection
You wouldn’t purchase a bunch of bananas without inspecting them, so you certainly shouldn’t go into a real estate auction blind. If you’re purchasing a home at auction, you are buying the property “as is,” so you are responsible for any repair costs you may encounter later on if you win. Auction Masters works closely with Edina Realty for our real estate auctions, so you can easily schedule a walk through of a property you’re interested in. Incorporate extra costs into what you’re willing to bid – it’s not worth getting burned down the line.
Know the Neighborhood
Location, location, location; it’s as important as you think. Start your research by driving around the area to get a feel for the amenities, quality of housing and recreation nearby. Don’t be afraid to start conversations with residents of the neighborhood to get their opinions of the property and the community. Since people’s opinions about a neighborhood can vary, you will also want to look at historic sale prices of homes in the area. The housing market changes yearly, and prices can vary dramatically by the block. Where you’re buying is about as important as what you’re buying.
Read Terms and Conditions
You don’t have to dedicate your life to real estate to bid on a home, but you should know exactly what you’re getting into before you start. Carefully read the auction description and pay close attention to details. If you ever have any questions about a property or an auction, you can always contact our team to clear things up. There’s no question that real estate is a big investment, so you may want to consult an attorney if you have any questions about the terms and conditions of an auction. There are financing, purchase agreements, disclosures and other contracts you will need to sign. Understand the ramifications of each before they legally bind you.
Buying a home at auction is unlike any other type of real estate sale. Whether you want to flip a home or you plan to live in it, auctions give you the chance to snag a home at a great price. As long as you go in with a game plan, you have the chance to purchase a one-of-a-kind property at a price you’re comfortable with. As with every auction, things can get very competitive, so remember not to get caught in a bidding war you can’t afford. Your due diligence will pay off eventually, so keep an eye on our upcoming auctions for real estate you’re interested in!