Have you ever considered buying a house at auction? Contrary to what some real estate agents say, buying a house through auction is actually one of the most practical ways for buyers to find a house. Most buyers who chose the conventional way of buying properties would often complain about the stressful and daunting process one has to go through when buying a house the usual way. Auctions, on the other hand, grant what is called an “absolute sale.” That is, once the hammer is banged after you made the last bid, the house is all yours.
But while movies made us believe that auctions are as easy as raising your hand (or your number) at digits you like, it isn’t totally a walk in the park. There are issues that you need to think about, too. So whether you are already decided or just thinking about it, here are the first three things you must consider when buying a house at auction.
1- Do you know the process and policies of the auction?
As home buyers, you have to play by the rules – the auction company’s rules. That means you have to be aware of their terms and conditions. Most auction companies give out flyers with their terms printed on it. Take time to go through them. If possible, consider calling the auction company and ask for information about future bidding. If there is anything that you don’t understand, make sure to speak with a lawyer or a real estate professional for clarification.
2- Have you viewed and researched the property?
Now the property you are looking at may seem like a beauty from the outside, and buyers often commit the mistake of not looking inside and around the house prior to bidding. Do your homework by checking out the background of the property. Talk to neighbors if you can. Find out if the property is foreclosed, on short sale, etc. An open house is often conducted for two weeks before the auction, so those who are interested can inspect the house before the actual bidding. It is a good idea to bring a real estate professional, an engineer, or an architect during your visit. However, this may mean you’d have to pay for their time.
3- Is this a house that you really like?
Once you’ve inspected the house, ask yourself the taxing question, “Is this a house that I want to buy?” But what is it that you really want? Write down the things you like in your future house, the things you like in this property, and the things you don’t like. Decide from there if investing in this house is worth your valuable savings.
On the day of the auction, you must come prepared. Be early to get a nice seat where the auctioneer will be able to see you. If you’re bidding for a really nice property, you might be surprised at how many people would turn out at the auction. Just keep your composure, think of your mission, and enjoy the bidding process! Stay tuned for part two of this discussion.