Real Estate Tips and Tricks

How To Buy Property At An Auction

Do you want to purchase a home? You might be able to get a cheap house at property auctions. Below are some tips to help you buy a home at a property auction.

Work with A Real Estate Agent

Your real estate agent will help you identify suitable properties on auction. The primary reason people buy property at auctions is that auction properties are a bit cheaper than those sold by individuals and real estate agents. As such, the asking price of the identified property should be lower than its market value. 

Your choice of agent must be licenced to work in your locality. Further, he or she should be experienced and affordable. The real estate agent should declare if he or she has a conflict of interest. It happens when the agent has vested interests in the property or if the property belongs to a close friend or relative.  

Preparing For Auction

Your real estate agent will help you prepare for the auction. It involves: 

  1. Appraising the property to determine its current market value.
  2. Conducting a house inspection to determine the condition of its structural components, internal fixtures, landscape and roof. The inspection will also examine the presence of pests and land contamination.
  3. Knowing the rules of the auction. For instance, how much of a deposit should you have at the fall of the hammer? How long do you have to make other payments? What are the accepted modes of payment?
  4. Organising financing. If you do not have the required deposit, the agent may help you get a hard money loan. The rest can be paid through bank finance. 

Your real estate agent will also explain the terms of the contract of sale. For instance, you may incur a penalty or lose the earnest money if you cannot pay the remaining amount before the closing date. The contract should prevent the owner from accepting other offers once you sign the agreement. 

Auction Day

You could either attend the auction or ask your agent to represent you as a buyer's agent. Typically, you will decide the minimum and maximum bids you will make at the auction. Bidding is a thrilling process. If you do not take caution, you could end up purchasing the home for higher than its market value. You are not allowed to make false bids. This is a situation where you win the auction but do not have money to pay the deposit or purchase the property. 

Buying property at an auction should be easy with the above tips. An experienced real estate agent will guide you through the auction process.  

To learn more, contact a real estate agent.