Residential Real Estate Auctions
Buying property through residential real estate auctions is a great way to get a bargain. However, buyers need to be aware of the rules and have their finances in order prior to placing a bid. Doing so will let them find houses that fit into their budget and help them attain the best price.
Houses which are sold through residential real estate auctions generally consist of foreclosure homes and properties which need to be sold quickly. This might include probate real estate or properties owned by banks, investors, or organizations that need to liquidate multiple dwellings.
In order to get the best return on investment, buyers will need to spend time exploring their options. One of the first steps is figuring out how much they can afford. When people buy auction properties using bank loans they generally have to get pre-approved before submitting bids. Most often, buyers are required to provide payment in cash or cashier's check when they win the bid.
The type of auction property purchased depends on how it will be used. For instance, many buyers are real estate investors seeking out low-cost rental houses. Others are private individuals looking for affordable homes to live in.
Most auction companies list properties for sale via websites. This makes it easy for buyers to search for homes in specific locations and price ranges, as well as number of bedrooms and baths or square footage.
It's always advisable to inspect auction property prior to placing a bid. Although auction companies provide details about each house they offer there is always the potential for mistakes. If buyers don't take time to look over the residence on their own they could end up with a dreaded money pit that negates the savings.
Research is especially important when foreclosure real estate is involved. It is imperative for buyers to understand foreclosure laws in the state where the property is located. Several states have foreclosure redemption periods which allow homeowners to redeem their house if they pay the auction sale price within the timeframe.
Although foreclosure laws vary by state the redemption period is generally 12 months. Other states, such as California, do not have redemption periods at all and auction sales are final.
Buyers will want to perform due diligence to find out if the property has any tax or mortgage liens. Tax liens can prevent buyers from taking possession and might even result in loss of property if the IRS chooses to claim it.
Next, look at comparable sales reports to get a good feel for the average price range. This can be accomplished by looking at online real estate sites such as Realtor.com or Zillow. Another option is to work with a realtor. It's always good to get professional advice, but especially so with foreclosure and auction properties.
Those who are new to buying houses at auctions might find it beneficial to attend a few before bidding. Watching from the sidelines provides good insight as to how the process works. It's also a great place to obtain information and advice from auction companies and attendees.
Although real estate has taken a hard hit it is still a valuable asset that can provide a good rate of return. Taking time to learn how to buy residential real estate at auctions can deliver big savings. We encourage you to visit our blog to read more about auction property, as well as other types of investing practices.
Published on April 15, 2013 at 03:01 AM