Tips for Buying Auctioned Homes

missmanors · #1 06-22-2008, 04:52 PM

Buying a home that is being auctioned takes a little research on your part first, to be sure that you are getting the best deal. Researching can save you, not just money, but time as well.

Quote:

A home typically comes up for auction when the owner - who may be an individual or a builder - has been unable to sell the property and the property has been taken back by the lender in foreclosure. Once the lender owns the property, it can choose to sell it with the help of a real estate broker - or through an auction company.

By eHow Personal Finance Editor

Buying a home at an auction has always intrigued me, but I was not sure of how to go about it in a way that would protect me from buying a kind of "white elephant". I was afraid of the added costs, in case there were some kind of liens on the property, or some kind of hidden costs. This article did clear up some of my questions.

Tips for Buying Auctioned Homes

patricia · #2 08-16-2008, 03:31 PM

i have also wonder on this. i see that they ask for a minimum deposit to be put down at the time of the auction, and then they say you have 30 days to come up with the balance?? is that right?

missmanors · #3 08-16-2008, 10:06 PM

That's the normal requirements for buying homes in an auction in my state of Ohio, I'm not sure of the requirements in other states, however. The 30 days gives you some time to get a loan for the payment of the home. I would advise that you go ahead and speak to some banking officials about a loan before bidding on the house you are interested in, this way you are all set when the bidding begins, and know just how high you can bid.

I don't know if all auctions in all states have the same requirements. I'm not sure if it's up to the auctioning company, or the homeowners, or the state. This would be something that you should research before thinking of buying a home that's being auctioned.

homealone · #4 08-18-2008, 07:05 AM

These are great tips. Often I have seen homes or properties which are being auctioned off and have wondered about them. Thanks for making this information easier for me to find. I never would have realized I would need to do so much research before considering to bid on a place. Now I know it is a must to save myself alot of headache.
Thank you very much Missmannors!!

patricia · #5 08-18-2008, 07:51 PM

Ditto! I would love to attend an auction, but am scared to do so, thinking i would over extend myself. How do you know how much you will need, from the bank? at an auction, it could sell high or low, and i might ruin my chance for a loan asking for to much, or lose the house not asking for enough????

thanks again!!!

missmanors · #6 08-19-2008, 02:27 AM

You don't need to finalize any loan from the bank, as you will have 30 days from the date of the auction to do this. What you want to do is to talk to your loan officer at your bank to determine how much money you can afford to borrow, ask questions to find out how much payments would be on the loan, etc. Also, of course, you will want to make sure that you will be able to qualify for the loan.

This way you are armed with the information that you need before actually bidding on a home, and will know your bidding limits, before the time of the auction.

After the auction, if you have won the bidding, you can then go back to the bank and then actually get the loan that you need to finalize the purchase of the home. You will of course need some cash at the time of the auction to put down on the home in question. In my area, this is normally 10% of the winning bid.

flip_it_fast · #7 08-19-2008, 03:28 AM

If possible, it is a really good idea to view the home in question before the auction day. This way, you know what you are getting ahead of time. Otherwise, you may be spending on a money pit that isn't worth the trouble. I don't know the laws and auction procedures for every state as far as viewing of course but it is something you may want to look into before taking that step.