|
|
|
Home /
Articles / Real Estate Auction Action - Buying a Home at Auction
|
| |
|
|
 |
|
Real Estate Auction Action - Buying a Home at Auction |
|
|
Due in part to the popularity of the U. S. Department of Housing and
Urban Development (HUD)'s home auction program, more potential
homebuyers than ever are buying homes at auction. Homes for auction
aren't limited to just HUD, however. Many government entities auction
homes for payment of back taxes, and some homeowners even auction their
homes on eBay.com!
Homebuyers considering buying a home at auction should take some steps
in advance to help them with their bid price, and even whether to bid
at all on a specific home. There will always be a degree of risk when
buying a home this way, but with a little diligence, potential
homebuyers could save a lot of money buying in this manner.
Before the auction, you should have your financing arranged, and have
enough cash on hand or in your bank account to cover a deposit on your
purchase. You need to check the features, location, condition, and
ownership history first. Afterwards, be sure to learn what the property
is worth by looking at sales of comparable properties in the same area.
Compare homes with the same number of rooms is possible, but be sure to
allow for price differences due to pools, decks, carpeting, window
treatments, etc.
At the auction itself, resist the temptation to get into a personal
bidding war, just "to beat out the other guy". Have a set price limit
and stick to it. Other houses will come along, and you don't have to
win the first auction that comes your way.
You should know that the price of a home at auction is typically the
loan balance (if foreclosed), plus any back taxes owed, plus legal fees
and other expenses in foreclosing the property. This will typically be
the opening bid amount, and the price will go up from there. Even so,
it's possible to get a great deal in an auctioned house, with a little
research and planning first.
Also, know that you probably won't be able to get an inspection, and
are buying the home "as is". If you can't do any needed repair work
yourself, or can't hire it done within your budget, you may not end up
getting such a bargain in the end.
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his
website for the latest on personal finance, debt elimination,
budgeting, credit cards and real estate.
|
|
|
