I was watching the Today Show recently and their real estate expert, Barbara Corcoran, had a segment about foreclosures and auctions. While the real estate market on the Main Line has not been hit as hard as other areas, there are still foreclosure properties on the Main Line for sale. Radnor, St. Davids, Wayne, Devon, Berwyn, Bryn Mawr, Ardmore, and Haverford are all great areas to buy in on the Main Line because of their great school districts and proximity to Philadelphia.
If you are currently looking to buy foreclosures at auctions, here are three really good websites to help you find these types of properties: www.foreclosure.com/, www.foreclosures.com/ and www.realtytrac.com/. Remember that most foreclosures are sold “as is”, so it is wise to have an inspection beforehand and to have a contractor provide you with estimates on any repairs or updating that the house is going to need.
Before going to the auction you should know your maximum bid. You don’t want to get caught up in any bidding wars. You will also need a cashier’s check, picture identification, and a pre-qualification letter. Auctions usually require 5% of the selling price as a deposit and they won’t accept personal checks. Also, it doesn’t hurt to have a picture of the house you are bidding on with you. More buyers than you would think end up bidding on the wrong house at auctions.
Some questions that are important to ask are: is there a reserve on the property and does the buyer have a right to rescind the contract? If there is a reserve amount on the property then the seller does not have to accept the winning bid if it is less than the reserve amount. If it is an absolute auction, then the winning bidder gets the property no matter what. Most auctions will give you a 3-day review period, but if they don’t grant you the right to rescind then you will be required to purchase the property. If you back out of the deal or can’t get a loan to purchase the property, then you may be held accountable for 25% of the selling price.
To get the best price at an auction, bid on properties that come up in the beginning of the auction. Those first on the list always go for less because people are gauging prices. Don’t let your emotions get you involved in any bidding wars. Have your maximum bid written down and in front of you. Dress very professional and sit close to the front. Most people attending the auction will think you are with a bank trying to buy back a property and will probably not bid against you.
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