Foreclosures, Part One: Are Auctions Worthwhile?
The real estate market is still in limbo in most areas of the country and foreclosure rates are well above average. It may be tempting to seize the day at a real estate auction. A few things to know before you go:
1) Keep your emotion in check. It can be easy to get caught up in the excitement of an auction, or the competition of outbidding everyone else. Keep in mind, however, that this isn’t Ebay. You are playing on a whole different level. This is business and you must keep a level head. You are not necessarily going to get a tremendously discounted price. Know when to walk away.
2) Inspect the property beforehand. Try to purchase only from those auctions that allow bidders to inspect the property beforehand. This is essential. Particularly with foreclosures, there are two reasons the property might be run down. If the homeowners didn’t have the money for mortgage payments, it is doubtful they had the money for property maintenance. Worst case scenario: the homeowner is so resentful over losing their home that they allow all sorts of “accidents” to happen around the house in the final days, lowering the home’s value.
3) Research the property first. What is the neighborhood’s approximate price ceiling? Are any developments planned that could affect property values? Information is the greatest tool in controlling yourself and keeping a level head at auction.
4) Be discreet. The name of the game at auctions is to play it close to the vest. If the research or inspection phases reveal anything that drastically changes your perception of the house, use it to your advantage in the auction.
5) Get your cash together. There is usually going to be a minimum $5,000 due immediately from the winning bidder, with financing often available through select lenders. Cash is king in the auction business.
One thing to keep in mind with the current market is that auctions are no longer all about foreclosures. There may be out-of-town job transfers or homeowners who bought a new home, never imagining that their old home would stall on the market. These types of frustrated buyers are also turning to auctions as a means of unloading property quickly. Whatever the situation, real estate auctions are nothing for the savvy, educated, level-headed buyer to sneeze at.
October 28th, 2007 at 10:17 am
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October 28th, 2007 at 10:23 am
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October 28th, 2007 at 10:25 am
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November 11th, 2007 at 6:38 am
[…] frankmarcel brought to you using rss feeds. Valuable information for anyone looking into home and real estate foreclosures.Here’s a brief portion of the articleThe real estate market is still in limbo in most areas of the country and foreclosure rates are well above average. It may be tempting to seize the day at a real estate auction. A few things to know before you go: 1) Keep your emotion … […]