I was a spectator at several residential auctions this year. For one, the home was run down, but many auctions are for well maintained homes. A contractor bought this run down home, and I think he got it for a good price. He has plenty of room to do a renovation right, and then sell for a profit.
For a buyer, auctions are a good way to find deals. But you have less protections. It is not as simple as ebay. Bidding for something over $100,000 is sure to make your heart race. But bidding against a real person also provides assurance that there is value in what you are bidding on. If you want to bid on a home at auction, then it is in your best interest to get all the help you can get. You can hire a Realtor such as us for no additional cost than if you were to bid and buy on your own. Most auctions have a buyers premium percentage that gets added to the final bid price. That percentage doesn't change if you have a Realtor helping you through it.
Ask a Realtor for help with the following:
- Finding financing is more complicated with an auction. You don't know what the price will be before talking to the bank. The bank does not know which house you are buying and its value in advance.
- Real estate value is local. Look at the other homes for sale in person that are in competition with the auctioned property. Do this in advance and you can get a feel for that value.
- A competitive market analysis (CMA) is a report on the local homes in competition. Find out what they sold for. How long did homes take to sell. Which homes went off the market. What price drops have there been. What is the absorption rate. What is the current inventory.
- An auction property is sold as-is. You can still get a home inspection for informational purposes. If you don't like what the inspector tells you, bid less or skip that house. If you like what the inspector says, you may be more informed than the other bidders and can be more comfortable out bidding them.
- Do you need estimates on repairs? Get the names of contractors and any experience people may have had with them.
- What would repairs do to the value. What should you fix. If you are an investor, how long could it take to sell once the repairs are done. Ask for a CMA for after repair value.
If you want to find a deal, then start your search at www.HelpShop.com. We provide the best tools for shopping for homes. The listing details for instance will show you the days on market, and the price history for that home. You can even search by price drop or days on market if you wish. Our MLS home listings search is something I am quite proud of.
As always let us know if we can help you with any of your real estate needs.
I hope everyone has had a enjoyable holiday season. Happy New Year!
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