How to Buy a House at Auction
- Posted by: Myers Jackson
- Category: Americas Auctioneer
How to buy a house at auction
If you are looking to buy a house at auction there are a few things that you will need to know. Being prepared and smart about your actions could land you the deal of the day. Lets starts with 10 tips that will help you prepare.
How to buy a house at auction: Research.
1. Do your research, start with a property ID number this can be entered at most County or Property Appraisers web sites. The Property ID leads to other data that has detailed information about the property. Such as the legal description, lien indexes, survey or plat maps. This is all important in your search. The more you learn, the more you earn.
How to buy a house at auction: Inspect.
2. Inspect the property, start by gaining access to the property. Well as much access that is allowed. Most properties are sold with inspection periods or special access can be given if you ask…so ask and take a look or get your home inspector or contractor to work.
How to buy a house at auction: Check Title.
3. Get a title check. Employ an abstractor, attorney or title insurance company to get a detailed title search. Yes this will cost you a few bucks up front, but may save you thousands if you make a mistake. Many auctioneers provide a title commitment prior to the auction but they are not always available. It would be a good idea if you have a good representative that will help you in your title searches.
How to buy a house at auction: Have money ready.
4. Have your finances in order. Most auctions require cash. So what does this mean. Well you can prepare in advance by having your banker have money available to you. Many people use line of credit and then arrange financing later or they just simply pay cash. The main point is to have your money ready when the auctioneer says sold. Many times a deposit or proof of funds are required, so make sure you have this to present to the Auctioneer.
How to buy a house at auction: Timing is Important.
5. Be early. This is a common mistake by many buyers who show up late to the sale. Being early allows you to ask questions or take one last look around. This also gives you time to size up your competition. Be a good sport complements your ability to but, however use every advantage possible to get that great deal. being early will allow you to listen to all announcements prior to the sale. Such announcements take precedence over all other written matter or oral statements.
How to buy a house at auction: Observe.
6. Be silent and inconspicuous to other bidders. This does not mean that you have to be a auction recluse, but you may gain the advantage by listening more. After registration, place that bidder card in your pocket and just listen. The auctioneer will make announcements, if possible ask the auctioneer in advance of the announcements all questions that pertain to the purchase so when it is time to bid you are prepared and ready.
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How to buy a house at auction: Educate your self.
7. Understand the term and conditions. These announcements will govern the sale and the process to buy. These are posted prior to the auction and if you cannot find them, then make sure you ask for a copy or read the posted documents. Saying I did not know may not protect you in the event you but a dud. You must look, listen and learn to gain the most benefit.
How to buy a house at auction: Is there a Buyers Premium?
8. Understanding premiums. Buyer premiums are used in most auctions in this day and time. The buyer premium is a fee that is paid to the auctioneer in addition to the purchase price. The amount of the fee is announced prior to the offering and is calculated on the final amount bid. Here is an example for a 10% buyers premium. If you buy a property for 100,000 dollars and then add 10,000 and you contract price will be 110,000 dollars. There may be a minimum buyer fee or premium such as $2500.00. Reading the complete terms and conditions will address this and allow a better understanding of how to buy.
How to buy a house at auction: Who pays closing costs?
9. Understand Closing Costs. This part is widely misunderstood by many buyers and sellers. Many believe that there are rules that govern who pays what and in most circumstance that is not the case. This is negotiated or decided between the parties if nothing has been arranged in advance. This is another reason to show up to the auction early and ask for a copy of the terms and conditions, listen to the Auctioneers announcements, this is where that the closing costs are announced and who pays for what.
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How to buy a house at auction: The contract.
10. The contract. The contract will be the legal document between the buyer and seller. This stipulated the purchase amount, down payment or escrow deposits, commissions paid and when the closing takes place. There will probably be other language that has been covered in the terms and conditions, this is very important to understand. This legally binds you to the transaction.
These are just 10 tips that may help you in you purchase of a home or other investment property at auction. Education, understanding and inspections are three keys to success.
If you have a question just call me Myers Jackson, I am the Auctioneer and I want you to make a smart purchase. Connect with me now 844-400-2828 Thats 844-400-AUCTION
This Post: America’s Auctioneer, Myers Jackson sells Real Estate
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