If you’re considering entering the real estate market as a business venture, a real estate auction could provide you with a way to get your foot in the door. However, what would you need to know before making your first bid?
RELATED ARTICLE: 4 REAL ESTATE PRINCIPLES FOR SELLING COMMERCIAL PROPERTY
How Does a Real Estate Auction Work?
Lots of real estate opportunities that appear at first sight to be attractive can lose their charm on closer inspection. This can be especially true of houses and apartments offered for sale at a real estate auction.
Therefore, minimize your risk by learning all you can about the property and its current owners before the real estate auction begins. This will help you to determine the appropriate price for the property before you submit your bid.
Above all, bear in mind that some real estate auction houses will require a cashier’s check for the full value of your bid. Other auctions may be set up for those who prefer more traditional real estate financing. In this case, it’s best to go to your bank and get prequalified ahead of time.
The Steps You Need to Take
If you want to buy property at a real estate auction, seek professional legal advice first. Ask your attorney to review the auction’s process to ensure that there are no procedural irregularities. For example, if you’re planning to bid in a real estate auction in California, contact Home Auctions California. In this way, you will get all the information you need.
Visit the property ahead of time and get a good look at it, at least externally. In this way, you will know where it is. (Location, location, location. Remember?) Additionally, you will be able to evaluate nearby neighborhoods and roads. This will help you to form a better idea of its true value.
In some cases, the auction house will hold an open house. This gives potential buyers a chance to view the interior.
Whatever the case, you’ll be able to get more information by carefully reading the notice that announces the auction. Auction houses must publish such a notice ahead of the auction. This announcement will contain basic data about the property. It will be published in a newspaper with wide circulation as well as announced on the air waves.
You can also obtain information about the property by reviewing its certificate of tradition and freedom. This is a document that details the history of the property, including who the owners are and have been. It can also reveal any liens, mortgages, and taxes due on that property.
Once you have learned all you can about the property, if you’re still convinced you would like to own that property, submit your proposal to the real estate auction house in a sealed envelope.
Prepare Your Bid
When you’re preparing your bid, take into account the obligations of the current owner. The proceeds from the auction will first pay any mortgages, liens, and taxes.
Generally, the proceeds cover any property taxes. However, the auctioneer assumes responsibility for fees for public services and administration. Nonetheless, the auction house wants to make their profit as well.
Take all of this into account so as not to be taken by surprise with expenses that turn your real estate auction experience into a bad business deal.
We hope you can use the information here to purchase property by way of a reputable real estate auction house. Good luck and happy bidding!