You’ve seen the ads in the newspaper for mortgage foreclosure auctions for homes in the area. Are you curious about how those auctions work?
If you do your homework and work with a Real Estate Professional like me, you won’t be buying blindly.
A lot of people are just plain scared because it’s a completely new experience, and it’s hard to jump right in without some guidance. I’m here to give you that guidance.
I’m sure you’ve been to an auction, and don’t those auctioneers talk way too fast? I think they have that patter of “auction-speak” to create excitement and get the crowd revved up to buy. Some buyers let their excitement get the better of them and they over-bid.
I have a few tips to share on real estate auctions:
1. Work with a Real estate Professional, experienced in Auctions, like me! I have spent considerable time learning the auction business from the buying perspective, and I can assist you with all of the steps below, and look out for your best interests. I’ll even attend the auction with you and keep you focused on what’s important.
2. Inspect, inspect, inspect…. You cannot visit the property too many times! By going to the property in advance of the auction, you can spend as much time as you want there looking over everything. You’re not going to get a Seller Property Information Report like you would on a regular home sale, so you have to check things out for yourself. How old is the roof, the furnace and the chimney.. These are all questions you need to answer for yourself. Did you know the serial number on a furnace can give away the age of the unit? That’s a little Realtor® secret I can let you in on. In the Winter months, you also want to be sure you look for frozen pipes. I can help you spot the warning signs of those. Usually I can gain access to the house anytime, so call me to see an auction property.
3. Prepare…. You must read all the auction documentation. Every auction company operates differently. Do you need to bring a $1,000 cashiers check, or will a personal check be acceptable? Do you need to pre-register or can you do it on site. Is there a website where you can see more information as the auction date gets closer? When I work with auction buyers, they are always prepared with the right documents and information they need so they are ready to buy. If you don’t arrive at the auction with the proper documents and money, you won’t be able to bid.
4. What’s your limit ? You should know well in advance how much you are prepared to bid. You can arrive at this number by inspecting the property and figuring the renovation costs to make the home what you want it to be. Then when the bidding gets higher than your limit, you just step back and stop bidding. You can’t second guess yourself when the auction is over, and think that you should have bid more. Have a solid number in your mind, that way when the auctioneer gets everyone all lathered up and bidding is going fast and furious you won’t get caught up in the excitement and over-bid. I can stand behind you and remind you of your upper limit and remind you not to go over.
5. I won!!! What did I just agree to? When you are the high bidder, you will be asked to sign a Purchase and Sale Contract on the spot. You should get a copy of this contract in advance to be sure you know what you are signing. There are costs involved that you will be paying that would normally not be your responsibility in a traditional sale, and you need to know those in advance to factor into your overall costs.
6. The day after… Now you sit, and wait, and sit and wait. The auction company has to process your paperwork, get it to the bank or other owner of the property, and your purchase has to be “approved” by the owner. This could take 7 to 14 days, or maybe longer! You have to be patient, and don’t start shopping for new appliances and rugs yet – you are not the confirmed new owner.
7. No, you can’t go back into the house… After the auction, you will not be allowed back into the house for any reason until the closing and you are the actual owner. You may want to take lots of photos and get all the information you might need while you are there on site. Sometimes the locks will be changed, and even I can’t get in.
8. Closing Day. When it comes time to close, it’s mostly like any other real estate transaction, except you don’t always get they keys at closing. Sometimes a company that handles security has to come out and let you in. This varies from auction company to company.
Are you ready to take the plunge? Do you just want to talk about the process? Maybe you should attend an auction with me to see how the whole process works before you jump in and bid. Spectators are always welcome at auctions, and I’d love to help you get more comfortable with the auction process.
For more information on auctions please call me at 802-447-3210. Troy