Property Auctions - Your Quick Start Guide
Property auctions can be a great place to find fantastic real estate bargains. However, working a property auction requires a few extra skills and knowledge. Here is a quick start guide to help you navigate your first property auction.
What is a property auction?
A property auction is exactly what it sounds like. It's a place where residential and commercial buildings are bought and sold. It's an auction and it works like any other auction. Buyers bid on a property and the highest bid wins.
Property auctions are generally divided into residential or commercial. And in order to attend you generally need to be approved.
Why do you need to be approved before attending an auction?
Imagine someone bidding on a property you're selling at an auction and when the day is done and the auction is over, the buyer cannot actually afford the property. It would be unfair to all those who bid on the property and certainly a misfortune to the person who is selling the property. Being approved before prior to the auction helps to avoid this unnecessary dilemma.
Why do people buy at an auction?
Price is the main motivator. You hear tales of people walking away from a real estate auction with a million dollar home that they bought for a dollar. That kind of deal doesn't happen. However, you can save an abundance of money on an auction home.
How do you prepare for an auction?
Most often there is a listing available to auction attendees before the auction. Use this list to research the homes before you attend the auction. Make sure it's in an area that you want to live or can rent in. Make sure the exterior is up to par and that as far as you can tell the home meets your goals and needs.
Preparation is important because you can buy an auction home and end up with a ton of unexpected expenses and surprises. Doing your research ahead of time will help mitigate these surprises.
How do you find out about auctions?
Auctions are listed in the newspaper, generally. It also helps to build a network of fellow property owners, auction attendees, real estate investors, real estate agents, and mortgage brokers. Real estate attorneys are helpful too!
Buying a property at a real estate auction can save you up to 60% of the home's value. It's a great place to find true bargains. However, proper preparation can also prevent unexpected surprises. You may want to attend an auction or two first before getting in on the bidding game. It's sure to be an educational experience.