Look to Real Estate Auctions for Great Deals
If you’re on the lookout for new real estate, whether for new business premises or for residential purposes, you have more options than you might think. People are turning to traditional estate agents less often these days due to their high fees. Instead, they are looking to private sales, online estate agents and real estate auctions to snag the best deals.
Real estate auctions can be a particularly great places to look for the cheapest property prices. Here, we’ll look at the main benefits of going down the auction route rather than the more traditional methods.
Real Estate Auctions Give You a Chance to Grab the Best Properties
There are a number of reasons properties can end up at auction. One of the most common is when the property has entered foreclosure, meaning the owner failed to make their mortgage payments for a set period of time. If they cannot pay the arrears, their creditors place the property on auction.
Now, as the auction is often the first place many properties are listed, it gives buyers the chance to grab some of the best properties before they are listed on the mainstream market. You can find some real hidden gems at real estate auctions, often for a much cheaper price than they’re actually worth.
You Can Save a Substantial Amount of Money
The main benefit of property auctions is the money you stand to save. Simply put, buying at auction could give you the opportunity to save thousands.
This is especially true if you’re buying a foreclosed property, as creditors are often keen to sell quickly to get the money owed to them. This means they would rather not wait months for the property to sell through more traditional channels at a higher cost. Instead, they’re more focused on getting as much as they can as quickly as they can.
No Backing out Once the Auction Ends
One of the main worries you have when buying a property through traditional channels is that the owner could pull out of the sale. Many buyers have found themselves right back at square one after thinking they’d bagged their ideal property.
With auctions, once the hammer has fallen, the property is yours. You’ll also usually own it within 28 days, so it’s a fairly quick process compared to other methods, too.
Things to Consider
We’ve looked at the main benefits of buying a property via an auction, but before you do, there are a few things you’ll want to consider.
Firstly, you need to understand the risks involved.
View any properties you are interested in before you make a bid. Auction houses usually have catalogues which they release a few weeks in advance of the auction taking place. This gives you the opportunity to arrange a viewing to see what condition the property is in. This will help you to better determine how much you are willing to bid.
It’s also a really good idea to simply visit a real estate auction before you bid in one. That way, you can see exactly how it works and get a feel for the process. An auction can be hectic. If you go into one not knowing what to expect, you could find yourself quickly overwhelmed.
You’ll Need a Deposit
Another thing to consider is the deposit. While you can certainly grab excellent bargains at auction, you’re still going to need roughly 10% of the price as a deposit. Different auction houses have different rules regarding fees and deposit amounts, so be sure to compare numerous auctions in order to find the best deals. Most require the deposit on the day of the auction. If you are serious about buying a property, make sure you have the funds with you on the day.
Do Your Homework Ahead of Time
It’s also worth researching how much similar properties are going for at your local estate agents. Most of the time, auction properties are cheaper, but that’s not 100% guaranteed. Similarly, you should always carry out the same checks on an auction property as you would anywhere else. This means enlisting the help of a conveyancer and double checking that there are no major issues with the building.
Make Sure You Have the Money You’ll Need
If you do win the auction, after you have paid the deposit, you’ll have just 28 days to pay the rest of the money. If you don’t, you’ll not only lose the property but your deposit too. Make sure you know for certain you have the money you’ll need.
Overall, buying a property at auction has many benefits over more traditional methods. However, you really need to do your research before you begin.