Points to remember before buying a property at auction
Now, many salaried class people can afford a house through real estate auction. If you are one
among them, you can bid and win a property as home prices have depreciated by 50%. A
property comes up for auction when the borrower is not able to pay the loan amount to the
owner and also he is not able to sell the property and so the property is taken back by the
lender for foreclosure. As now lender is the owner of the property, he can sell the property
through real estate broker or an auction company. Before buying an auction property it is
important to follow certain instructions.
Find out the details about property auction. If a single property is going in for a
foreclosure, find out the size, amenities and other facilities available. Find out the
opening bid amount. With the help of county recorder, you can find out details about
other foreclosed properties available in that area.
You can ask county recorder sales price of other similar properties in that area so that
you can get an idea of what is the value of the subject property. Properties within 3
miles of the subject property are the most reliable predictors of value. It would be
better if you could find out price of properties which has same number of bedrooms,
bathrooms and square footage if possible.
Before going for bid make arrangements for deposit amount. You may require nearly
$1000 to $5000 for an accepted bid and the remaining amount has to be paid within a
certain period of time.
Know your price limit before going in for auction. Auctions work on creating an
atmosphere of agitation and excitedness. The more frenzied the auctioneers can get a
crowd, the more likely the prices will be bid up.
If you feel at the time of bidding, you can’t pay deposit amount also as the bid amount is
increasing you can stop the bidding from your side and walk away. Don’t feel that you
have to buy something just because you are ready. If the deal isn’t right for you. It’s not
Before going in for bid do check the house. Consider the house’s general layout. Is it big
enough for your family and belongings? Find out how much storage space does the house
have. Does the house have enough space for parking? Find out the various amenities that
are available in the house. Do they have built in dish washer, washing machine etc. Have a
look at the yard. Is it big enough for your outdoor activities? Look in are there are cracks in
the foundation, ceilings and walls. Check walls and ceilings for signs of water damage. Do
check windows. Look at the number, condition and size of closets. Do inspect floors and
carpet for wear and tear.
Source: Property Auctions