Are you looking to purchase a home for sale, but don't want to pay full price? A real estate auction could be just what you need to find a cheap property. Auctions are typically performed by banks when trying to sell property that has been repossessed, but could also be performed by your state to sell confiscated property due to unpaid taxes or debt. Be aware of the 3 kinds of auctions that exist.
Absolute Auction
In an absolute auction, the property sells to the highest bidder no matter what that bid is. When the bid is only $1, then that is what the property sells for. These types of auctions can let you get the best possible deal on a home for sale, but takes a ton of work. You'll have to search for properties that others may not be interested in because they appear to be in bad shape, but actually can be easily salvaged. Always go into absolute auctions with a max price in mind so that you do not get into an expensive bidding war with another buyer.
Minimum Bid Auction
This kind of auction is designed to get a minimum value for the home, no matter what condition the property is in. Thankfully, this minimum bid is noted before you attend the auction, so you can be well aware of the condition in advance. Auctions with a minimum bid usually go well over that amount, so plan your pricing strategy accordingly. It helps to thoroughly look at the property prior to the auction to make sure that it's worth the minimum bid price. If not, don't bother going to the auction.
Reserve Auction
Think of reserve auctions as a promise to buy a home rather than actually bidding on it. Once the auction is finished, you have the option to back out of the deal. This gives you the time to have a professional home inspection done, as well as do other kinds of due diligence to make sure the home is of acceptable quality. Don't make the mistake of bidding on several properties at the same time that are reserve auctions, since you inspections and appraisals for each home will cost you money
Does this auction process sound appealing to you? If not, work with a local real estate agent. They can help you find a cheap home that doesn't involve jumping through all the hoops of going to an auction.
Share3 July 2016
After I decided to buy a new home, I realized that I probably needed to prioritize the things on my wish list. Since I am not wealthy, I realized that I probably couldn't get everything that I wanted out of a single home--at least, not this time around. Fortunately, I worked with an incredible real estate agent who helped me to figure out which type of property would pay off in the end. Finding a home took a lot of time, but I am really pleased that I found the right one. This blog is all about learning to prioritize your home hunting wish list so that you can have the home and financial situation of your dreams.
