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Real Estate Auctions: In Your Favor Or Not |
By:
Joe Mack |
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Real Estate Auctions: In Your Favor Or Not
Joe Mack
Everyday we watch as the rising number of bank owned properties increases. Every neighborhood is flooding with these unmaintained eye soar properties.
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.
The banks are becoming very creative with their advertising. They are offering great rates and many other interesting things. They are starting to utilizing auctions today on their foreclosures a lot more.
Auctions have always been a very popular way to sell. The boundary's are pretty much limitless. If you have anything to sell an auction can be used.
Auctions can be held almost anywhere that a microphone can be setup. The mobility of theses auctioneers makes these live auctions very popular today. They are able to setup a whole auction in front of a house in less than twenty minutes.
When I go to an real estate auction as an investor I'm looking for a good deal. I know exactly what I am looking for. Also, what price they are worth and what I am willing to pay. Just too many times I just watch people bid them past what they are worth on the open market. On top of that they have to pay the auction house for its time. At that point you could of just made an offer on a similar property for a much lower price.
A fix percentage of the final bidding price is the most common way an auction house gets paid. That amount is added to your bid to make the final purchase price.
Always remember when bidding that you have to calculate the auction house's commission in the price. Just imagine purchasing a house at $200,000 and having to pay 5% commission now your actual purchase price is $210,000. It will amaze you how fast everything adds up.
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.
You would think that the minimal bid would be the lowest acceptable price for the seller, but no it is only a teaser. In the minds of these lenders they would not sell their properties at that low of a price.
The reason why many auctions have such low beginning bid amounts is because they have reserve amounts. Which enables them not to sell the property unless you bid the price above the predetermined acceptable price set by the seller. The only place that talks about reserve amounts is in the small print in the back of their pamphlet. In the front of the pamphlet no where I can find a mention of a reserve. I wonder why?
I thought that a reserve bid was already was a joke. The worst one is that the seller has typically has seven days to accept you bid or not. In other words at any winning bid amount it is there decision if you will get it in the end.
The most frustrating part is that they made you pre-qualify to bid at the auction. You could have just spent your own time making offers. In the end the lenders decide either way!
I recommend to go to an auction for your self. Just be aware of everything before bidding
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Article Source: http://www.statssheet.com/articles/article71710.html |
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