Are you one of these people who buy properties in a traditional way? Well, the traditional home buying procedure is very effective. This includes hiring of real estate agent, visiting open houses, house bidding, and seller’s negotiation. However, have you ever think of asking yourself how to buy a house at auction?
In fact, non-traditional way of home buying is mostly successful. And one way to acquire a property is through real estate auctions or public sale of the property. Auction homes are the best option to buy at a competitive price. Before, buying properties through foreclosure auction was very limited to professionals and real estate investors. Today, those home buyers that are non-professionals get many benefits from buying through auction house all over the country.
Why properties are sold at public auction?
Actually, there are reasons why homes sold at foreclosure auctions. One of the reasons is the original home owner does not pay the mortgage at the desired length of time. In this case, the mortgage lender took the possession of the property and plan to sell it to recover the amount of money that the homeowner owed.
The following are the tips on how to buy a house at auction;
1. Find properties
It is very important to have a regular information regarding auction. You can do this by developing a system that could keep track all the properties that attracts you. Having a tracking system is very important when you are planning to buy auction homes.
One way also to find properties at an auction is through visiting some websites. Online searching is a good option to find them. You can view the condition of the properties and the neighborhood. For some investors and property buyers, they drive the property by means of meeting personally the home owner and this can be also done at the last minute of an auction.
2. Verify the Status of Auction, Location and Procedure of Bidding
After the auction for the property is scheduled, the home owner can still stop the process of foreclosure by means of paying the debt to the lender. Mostly, auctions are held in public places in the location of the property. You can find auction homes from the county clerk and trustees. You can also speak with the county clerk and make some clarifications that you are interested about the location of the foreclosure auctions of the mortgage and not a tax auction.
The process of the bidding depends on the state. Before engaging to auction, familiarize yourself first about the procedure regarding the bidding auction. In other states, the bidders are obliged to carry with them a full amount of cash to the auction. However, in some states, they are only allowed to bring certain percentage of cash to the auction.
3. Check For Some Bargain
Find out the exact value of the property in the market like how much debt involved in the property and if the present homeowner has liens against that property. You can do this through research with the use of different property report tools because this is for public information.
4. Determine the Amount of Bid
It is important to know the bid amount so that you can prepare yourself financially and how much cash you must bring to the auction. You are not also qualified for the bid if you did not meet the requirements. In case you do not have the cash to bid, you have many choices to make. First, you can avail a home equity loan in the form of cash. Second, if you cannot get a cash loan, you can buy pre-foreclosure property and this can be obtained by means of regular mortgage loans.
5. Engage in Auction Bidding
Before engaging to the real estate auction, call first the trustee before the said auction if cancelled or not. If it is postponed, another date of auction is set up. Go to the auction early and find the auctioneer immediately. It is very intimidating to engage in auction house especially if you are a newbie like you have never been done it earlier. However, get some clues from other participants in the auction and do not allow them to dictate the amount of bid for you.
6. Get Property Ownership
If you win the bid, be sure to get the important documents. The documents can be obtained in the auctioneer and this can guarantee that you win in the bidding procedure. Make some clarifications from the auctioneers and from the attorney of the real estate regarding the steps before you could take the property ownership. However, in some other states, the ownership of the property can be transferred within several days or weeks.
It is very easy to get property through a real estate auction. The above information can help you get through it.