One of the most popular modern means for finding your dream home is through attending home or house auctions. While many people may not realize this, home auctions are indeed one of the most practical, efficient and affordable means for acquiring a new home.
While you can indeed find a beautiful home easily through house auctions, you can also sell your home quickly, for an excellent price. You may find that your home does far better through an auction service than on the standard property market.
Answering Your Most Asked Questions About Home Auctions:
What Are House Auctions?
A house auction is where the seller of a house is putting the house up for sell. Instead of using the traditional means to sell the house they need a faster close so they put the house up for auction. This typically means that the seller is in financial stress or that the previous owner has let the house get foreclosed on. House auctions are also used when the owner occupant dies. The family may not live close enough to sell the house themselves. Home auctions are different than any commercial property auctions.
Absolute Auctions go to the winning bid. The beginning price does not have to be the balance of the mortgage. Lenders and auctioneers use lower amounts to get bidding started. Foreclosure auctions are different as the lender can not make a profit from the auction. At the auction you are actually bidding on the lien to the property and not the house itself. This means that you will have the lien to the house. There is still some legal hurdles to actually gaining the deed to the property.
Are House Auctions Cheaper?
Sometimes. You need to do your research and make sure that the house is in good condition with no additional liens. You will also want to check on the neighborhood and resell values. Most of the time the value is not all because of the selling price of the house. It is often more important to know the condition of the house, the neighborhood, and what all liens are on the property.
Start with getting the best data on foreclosures in your market.
Are House Auctions Cash Only?
House auctions or home auctions are not cash only. You have to be prepared if you are going to finance a house that is going to auction. Make sure you get preapproved for a loan in order to finance any property that goes to auction. That is different than being prequalified. If you do your research and find the lender that has foreclosed on the house you can get preapproved from that lender and it may help your chances in your bid being chosen. It does not lock you in to that lender if other lenders offer better terms.
What Are House Auction Fees?
Auctioneers work on commission. It is typically a portion of the amount that the house sells for. That is typically a percentage. They also work on a minimum fee. So if the auctioneer is working off of a $500 dollar minimum and or 10% commission would make $10,000 dollars off of a house selling for $100,000. The minimum is in place so that if the property sells for a low amount, the auctioneer still makes money. The commission structure works the same way as a Real Estate Agent commissions would.
Can A House Auction Be Stopped?
It can be almost impossible to stop a house auction from a mortgage lender that has foreclosed. Often it is easier to talk to the lender and work out a purchase or short sale if you are looking to buy the property. If it is your house that is up for auction you have very few options. You will need to follow the process for stopping a foreclosure.
Can Anyone Go To A House Auction?
Short answer is yes. Anyone can go to a house auction. Make sure you have done your homework and been to auctions before to get a feel for the auctioneer and other “sharks” or investors. Know the rules to the auction you are going to. How much do you have to put down to secure your bid? When is the balance due? Can you finance?
How Do Online House Auctions Work?
Online house auctions are the same as a normal auction except the entire event is held online. There are some special rules to follow when attending an online auction. One of the main things is to watch the bidding at the end because that is where most of the action is.
Are House Auctions Worth It?
They can be worth it. Especially if you find a great deal or your can increase the value of your real estate quickly. Make sure you know the ins and outs of going to an auction. Do your homework, don’t spend money you don’t have, and have your financing lined up before you go to any auction.
Why Buy Houses At Auction?
The main reason to buy a house at auction is for the value. If you are patient and find the right deal you can make a lot of money. The opposite is true as well though. If you rush and don’t do your homework you can buy a money pit! Financially houses at auction can be a better value. That doesn’t mean that they are always. Knowing the market and doing your research is the most important step in buying a house at auction.
Why Choose Home Auctions over the Usual Property Market?
Many people that sell homes through auction are looking to get rid of their property as quickly as possible, and will indeed settle for a price that is far more appeasing for the buyer than it would be on the standard property market.
If you are interested in a home that will be on auction in the near future, you will be presented with an opportunity to tour the actual property before the auction day. This will provide you with the perfect chance to see if this is the place envisioned in your dreams or not, and whether your family would be suited for this move.
A Fast Acquisition
Anyone that has ever bought or sold a home on the standard property market knows how drawn out this process can be. With how badly the economy is doing at the moment, and the knock-on effect such a downfall has had on the property market, too many people today struggle to sell their homes for the price that they need.
You may have experienced an almost desperate situation where you and your family were forced to sit around waiting for months or even years for a suitable buyer to come along and liberate you.
With auctions, this process is eliminated completely. On the of auction, as soon as the final highest bid is confirmed and that hammer falls, then your home has been sold. After some standard rights administration and the like, you will be wired a handsome transfer and you and your family will be free to continue on your way.
Cutting out the Middleman
Estate agents will always take a hefty sum of cash from a sale, and you may find that their services unfortunately are not up to your expectations when you find that they cannot find you the level of buyer that you require.
Through auctions sales, such a cost and procedure is completely eliminated. Of course, the auction house will charge you a nominal fee, but this is still a fraction of the cost of estate agents.
An Exciting and Limitless World
You will find limitless potential in the world of auctioneering. There is a constant stream of wonderful properties entering the leading auction houses close to you, and you will soon find that you enjoy attending auctions just to see how a certain property performs during the thrilling bidding process, which you may even find yourself joining in on!