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When thinking of the traditional idea that a real estate auctions are really just for bargain foreclosures or huge million dollar mansions has changed in recent years. Now a days, there are all types of homes that are sold at auctions. It doesn’t matter what type of property you buy at an auction, but you need to be aware that you are purchasing it ‘as is’ without any option of asking the seller to make any repairs or while you wait to sell your current home.
Image: Peachtree Bennett
Sometimes as a buyer, you may not always get that bargain price at an auction but auction sellers can often be willing to sell or below market price in exchange for a non-contingent contract from a high qualified buyer. I wanted to share some tips on purchasing a home through auction for those of you who are there in your season of life. Hopefully these tips can help guide you into the perfect home and what to prepare for when purchasing this way.
Get To Know The Market - To really understand the market, you need to really understand what other homes are typically selling for in that area. This can help you to prevent from over bidding at an auction.
Prepare Your Finances - Although you can pay for your home in cash, you can also participate in an auction if you are planning to finance your purchase with a mortgage. You need to get a preapproval letter from your mortgage lender based on your completion documentation of your finances. YOu’ll also need to get cash for a deposit before you bid and put a down payment down, which can be about 10 percent of your winning bid. Also, think about your estimation of fees and subtract them from your pre approval amount to establish what you max bid amount should be.
Get E-Mail Alerts - Most auction sites like Auction.com will allow you to enter your email address and a certain criteria like your zip code and price range to help you receive alerts when a property that you might be interest you is registered for an auction.
Inspect The Property - Auction companies post very extensive information about the property about 30-4 days prior. This can help you with several open houses so buyers can visit the property. Sometimes you can schedule a private visit and even bring your own home inspector.
Figure Out How To Bid - There are different auctions that take place in person or even online. You can visit the auction company’s website or even call their office to determine this specific information. Some companies require you to register either online or in person as well.
Get A Deposit - Auction companies require a deposit which depends on either on the estimated property value. The money either will be a credit card or cash that will be held in escrow by the auction company until the auction ends. If your bid wins, the deposit will be credited toward your buyer's premium and your down payment. If you lose the auction, your deposit will be returned to you.
RuLes Apply - Despite if you bid on the phone, in person or online, make sure you follow the rules, and all of the, of the auction company. If your financing falls through, the seller can keep your deposit and may even be able to sue you for breach of contract since no auction contract can include a financing contingency.
Close Fast So Be Ready - Typically, you will be required to close within about 30-45 days after the auction sale.
Image: Peachtree Bennett
If you are thinking of purchasing a home through auction, make sure you are as educated as possible. Also, make sure you have your fiances established, evaluate the property and have a firm max bid so you don’t overspend. One company that has your one-stop shop for all things involving quality auctioning is Peachtree Bennett Auction Gallery. They are recognized estate liquidators in the Atlanta area and a cornerstone auction house in Atlanta antiques and estate appraisal services. Their personalities are seen in their teams integrity and natural generosity for all that come into contact with them. Peachtree and Bennett’s unparalleled customer service, our diverse sales venues, and their innovative marketing have established us as their premier auction house in Atlanta. They also offer an unforgettable auction experience through various services that are designed to meet their clients needs. Find out more information on their Twitter, Facebook or Instagram.