Click here to get this post in PDF
Purchasing a home at auction is becoming an increasingly popular option. It can be a great way to get a bargain, especially if you plan on purchasing a foreclosure home. The finance company will be looking to cover their costs only.
Foreclosure Homes
Foreclosure homes are those that have been reclaimed by the finance company as the people in the home were no longer able to pay the mortgage. The mortgage company simply wants their funds back, they are not allowed to make a profit, anything over the value outstanding is returned to the previous owner.
Of course, you generally can’t inspect the home before you start bidding. This means you don’t know if the people have trashed the home inside or not.
The Right Auctioneer
If you are going to purchase a home at auction it is imperative you choose a reputable real estate auctioneer. This will ensure you are getting a fair opportunity at the property and you know exactly what costs you are letting yourself in for before you start.
You can ask around and check social media to confirm the reputation of your chosen auctioneer. This will allow you to bid with confidence.
Finance Ready
People auction their homes because the sale is quick. That means you need to have your funds ready before you start bidding. Not only will this set your limit, but it will also allow you to pay after the bid and avoid getting yourself into hot water!
Know Your Limits
It is possible to organize finance before you go to the auction. You will need to chat with your mortgage company and establish what you can borrow and under what circumstances.
Once you know our limits you can start bidding. But, make sure you stay within your limits. It can be easy to get carried away when bidding, resulting in potentially serious issues.
Building Survey
You may not be able to inspect the property but you can commission a building survey. If they are not allowed in then they can use a drone fitted with a thermal heat camera. This will help you to identify potential problems with a home and adjust your offer accordingly.
Don’t forget that your home may need work doing, you need to have enough funds left to be able to do this.
Visit First
If you have never been to an auction house it is a good idea to visit your chosen one first and watch a sale taking place. This removes the stress of bidding and allows you to see what happens at one of these events. This will help you to be prepared to bid when you need to.
Be Prepared
While the opportunity to get a house at a reduced value is attractive, remember that foreclosure homes don’t always appear at the auction as intended. This can be due to a lack of paperwork or the current owner managing to come to an arrangement. In short, be prepared not to get the property; it will help to keep you level-headed and find the right deal at the right price.
You may also like: A Beginner’s Guide To Investing In Commercial Real Estate
Image source: stock.adobe.com
