Buying a House at Auction
With the current state of the economy many homes that were foreclosed are being sold at auction. Buying a house at auction has many benefits. Buying a house at auction can save the buyer money and can also be a very quick process. Buying a house at auction can also be very tricky. If the house is being sold at auction was foreclosed by a bank, the bank will typically send a representative who will bid on the house to make sure they get a minimum amount for the house. Sometimes the current residents of the home also try to bid on the house.
Important Facts about Buying a House at Auction
When buying a house at auction there are no contingencies. If you bid on the house at auction and then win you almost always end up buying the house at auction. It is very difficult to back out of buying a house at auction. If you choose to back out of buying a house at auction then you will most likely have to pay a percentage of your bid as well as other damages which would be clearly stated in the contract signed on the auction day.
Tips for Buying a House at Auction
Before bidding get a pre-approved mortgage. It is important to have a secure lending source before buying a house at auction. If you place the winning bid at an auction and then cannot get funding you will have to back out of your buying contract and have to pay a percentage of your bid and possibly other fines.
Make sure to have an inspection done before buying a house at auction. Sometimes houses at auction have been without owner for many years or have been poorly taken care of. Getting an inspection before buying a house at auction can save you lots of money in the long run and also can help give you an idea of what to bid on the house.
Set a maximum bid and stick to it. When buying a house at auction it is easy to get caught in the excitement and end of paying more than you had planned on the house. Decide what you maximum bid will be and do not go over.