Are Real Estate Auctions Right For You
Joe Mack
The lenders unwillingness to adjust the prices on their properties is affecting us greatly. We are getting consumed by all the vacant homes.
The lenders out there will have to learn to take the bite. Do not worry they are very creative and will get their money back from you another way.
There are not many ways out there to get these properties sold to home buyers or investors. One of the biggest ways to come to my mind is live auctions.
Online auction house's popularity is huge today. You can have a mild auction feeling in the comfort of your own home. All it takes is a little addiction to online auctions and before you know it you will be at the live ones.
One of the first auctions I attended was held on the front yard of the property being auctioned. I was pretty mad that they showed up about forty-five minutes late. Within less than five minutes of their arrival the auction was over. It is truly amazing that from start to finish it was over so quickly.
Everyday I drive through my neighborhood I see more and more auction signs popping up. I assuming that the lenders are trying to get a higher price than on the open market. It is true than they can receive a higher price at auction. I have seen it with my own eyes people bidding up properties more than they are worth.
Auction houses like most business have to get paid for their time. They usually work on a fixed percentage commission or a flat rate fee. The typically percentage is around 3% to 5%. Some of them even have a percentage and fee per winning bid.
When bedding at an auction remember to calculate all of the costs when evaluating your bid. Make sure to have a maximum bid that you will not pass. Your maximum bid should include all your costs like auction fees, closing costs, and anything other you can think of.
The problem with a significant number of auction houses today is their rules and guidelines. Usually rules and guidelines are to protect the buyer and the seller but I wish that was true. Be very careful and read all of the small print pertaining to the auction you are interested in attending. Make sure you read the sections pertaining to bidding and buying at auction.
The first few pages of an auction always show you what an amazing deals you could get. In truth those numbers are just there to get your attention and motivate you to actually attend. Do you think that anyone would sell a house $500,000 home for $79,000?
I always thought the when you go to an auction if you bid the highest you win. I wish that was actually true. Many of the auctions have all things these super low starting points. It seems that they always forget to mention that there is a reserve price in the front of there books. Basically those numbers mean nothing and are just a fantasy. The lenders still get the price they want or they don't have to sell.
Did you know that if you win an auction the seller typically has seven days to accept or deny your bid? Even if you win and your bid is higher than their reserve that does not mean that you have won.
I can see that the auctions are in the favor of the seller. One of things that I hate the most is wasting my time. They make you fill out forms then make you pre-qualify to bid. If I knew my final bid really meant I won that would be different.
I do think that the experience of an auction should be felt once. You never know you could get that deal.
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