- Real Estate
Home Auction - How to Make a Bid
If you have never considered buying an auction, know there is where you can find the deal of a lifetime. Homes being sold at an auction are home that could not be sold by the owner or builder and have been taken back by the bank or lender.
The lender can enlist the assistance of a broker or through a public auction. The auction usually takes place in the county where the house is being sold. The opening bid on the home is usually based on the amount of money owned to the foreclosed lender.
Find Home Auction
There are many place to find current information on homes that are going up for auction in you area. You can get a free listing of foreclosed homes from the newspaper, HUD, your country hall, or real estate agents in your area.
If you contact your local auction house you can request you name is placed on a mailing list so that they can inform you of future auctions.
Previewing the Home
When you find the properties you may be interested in find out if are having a preview of the home or giving tours of the homes. If they are not giving a tour, go by the property yourself, even though you may not be able to get in, you can get a general idea of what the property looks like and many times you may be able to peek in the window.
Before attending a home auction is to research more than one property, so that you have another option if you do not win the bid on the home you had you heart set on. Make sure you have recent and updated information about the home for auction.
Get the specifics such as, how many rooms, their dimensions, the balance owned on the property the tax rate in that area and what the opening bid will be. You can find a list of properties in foreclosure at your county, or Title Company.
You may request a property valuation report, which will provide a complete picture of the condition of the home, its true value and any and all repairs needed to be done on the home being auctioned.
Make sure there are no liens on the property, because many times the person who buys the home will be responsible for them.
Unless you have several thousand dollars in cash on hand, you will need to be pre-approved for a mortgage.
Before you go to auction, make sure that you have your financial package prepared so that you are ready to bid.
If you did not get financed before the home auction, be prepared to put down a deposit of up to $5000 to be eligible to bid on the home.
If you win the bid you have a certain amount of time to become financed for the home.
What to Expect at an Auction
Stick to your Bid
Know you limits, decide before you go to auction how much you can afford to pay for the home. It is easy to get, “caught up” with the excitement of everyone bidding for the same home.
Auctioneers, try to create an atmosphere of competition and urgency to get the bids higher. So, leave your pride at home and stay within you limits. Backing out of a bid can cost you up to 25% of the cost of the home.
If you win the bid contact your lender to complete your financing. It may take up to 30 day to close escrow. Don't make any repairs to the home until you have closed on the home.