Have you ever considered buying a home in Lancaster at a real estate auction? Many homes are sold in Lancaster by public auction. It seems to be a popular method of sale for some consumers.
However, it is important to understand standard terms of a real estate auction if you are buying a home for sale in Lancaster, PA. An important consideration for purchasing a home through public auction is the home is sold as is at the time of auction. A home inspection, if done, is required to be
done before the auction is conducted and before a consumer will know if he or she will submit the winning bid. There is no contingency allowing for a home inspection after the winning bid is submitted and allowing the contract to be cancelled. If a buyer decided to cancel the contract the earnest money deposit will not be returned.
Secondly, the earnest money deposit is often a minimum of 10% of the winning bid. If buying a home in Lancaster at a public auction for $300,000, the buyer must write a check for $30,000 at the end of the auction.
The buyer of a public auction home for sale in Lancaster, PA will have more limited financing options available to them. The third consideration for a consumer is the need to get preapproved by a lender before the auction occurs. If a person is unable to secure financing, the earnest money will again be at risk with no contractual term allowing for the cancellation of the contract.
The fourth consideration for a buyer purchasing a home for sale in Lancaster, PA at a public auction is the expenses. In a typical real estate transaction in Lancaster, the buyer and seller each pay 1% of the transfer tax for a total of 2%. In a public auction, the buyer typically pays 2% of the transfer tax. The seller does not pay any of the transfer tax. Another expense consideration is related to paying your real estate agent if you have signed a buyer agency agreement. Most auctions will only pay 1% commission to a real estate agent. As a buyer, you may be liable for an extra amount to pay the commission of your agent.
The option of buying a house in Lancaster, PA at a public auction will not be an option for most buyers. If it is an option, then a buyer needs to be informed before trying to purchase a home through an auction.
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