Has a friend or family member bragged about an incredible deal on a home they snagged at an auction? This may have left you puzzled, not to mention jealous that you missed out on such a great opportunity. If you’ve never bought or sold a home through an auction, it’s important that you take the time to learn about the process before getting involved. Here’s everything you need to know about buying a home at an auction:
Auctions are only for the brave.
The main reason why so many buyers steer clear of auctions is you are not permitted to look through the home prior to making a bid. When you make an offer on a home not listed through an auction, you have the opportunity to tour the entire home and even call in an inspector to take a closer look. With an auction, you don’t get the chance to do this until after you have placed your bid. This means you could potentially be bidding on a home with serious structural damage, leaks, mold growth, or even a home that has been destroyed by the previous owner.
Don’t expect everything on your wish list.
If you have high expectations for what your future home should look like, it’s probably best that you avoid buying it at an auction. Auctions are designed for buyers who are not adverse to renovations and who are more concerned about getting a great deal rather than the home they’ve always envisioned. There is not a huge selection of homes on the auction block, so don’t expect to find one that has every feature on your checklist.
Have a cut off price.
When you go to a live auction, you can accidentally get caught up in the excitement of placing bids and outbidding the competition. At the end of the auction, you could find yourself way over budget and stuck with a home you weren’t even crazy about in the first place. Before you go to an auction, Google the address and research how much homes in the neighborhood are worth. Then, talk to a real estate agent about the specific property that is being auctioned off and with this information, come up with a cut off price. If the bidding goes above this price during the auction, stick to your plan and walk away from the deal.
Remember the repairs.
When you figure out how much you want to spend on an auction home, make sure you are leaving extra room in your budget for repairs that may be needed. Remember, you won’t know the condition of the house until after you have placed a bid, so there’s no way of knowing what the repairs will cost you ahead of time. Stay cautious and plan for a lot of repairs so you don’t find yourself way over budget.
For more advice on real estate, talk to the pros. Contact our team of real estate experts at Coast 2 Coast Realty who have years of experience listing and selling homes in the Tampa area.