Purchasing property at real estate auctions can be a great financial move, but it can also tank your finances if you don’t research enough beforehand. And while some of this research requires patience and thoroughness, securing a viable property rather than a money pit can be well worth it! The deciding factor is usually how well you’ve looked into the property and completed your due diligence before placing a bid.
Purchasing a home at a real estate auction is a high-stakes endeavor that can be riddled with stress and uncertainty. Pre-bidding research ensures you are making a sound investment and can also remove a lot of the stress you feel throughout the process.
Therefore, you will want to focus on the following actions before deciding whether to place a bid or not.
- Get a professional building report. Many people approach real estate auctions as they would gambling. But this type of huge purchase shouldn’t be a gamble – and it doesn’t have to be. If you thoroughly research the property beforehand, you should know what you are getting into. And that’s a lot safer than trusting your gut instincts. Getting a professional builder to conduct a proper inspection can save you tons of money since these individuals know how to spot major damage or defects. This activity is important since auction sales are legally binding. So, if you find the damage after making the purchase, it’s your problem to address. No matter how much buyer’s remorse you may have, you are the legal owner.
- Look at the sale contract. Many homes sold at real estate auctions have legal issues surrounding them. There have even been instances where squatters have been found occupying the home after it’s been purchased at an auction. These scenarios can be a legal nightmare, which wastes your time and drains your bank account. It can turn even a great investment into an ordeal. Before bidding on any property, obtain a copy of the sale contract and have your attorney review it for red flags. They can likely explain the possible risks with the property you are considering and may even be able to advise you on how to protect yourself from potential legal pitfalls.
- Pay attention to the neighborhood. Everyone knows the first tenet of real estate – location, location, location. It’s not enough to focus strictly on the home’s condition; you should also do your due diligence by researching the neighborhood. If the real estate auction offers an open house, it’s a great idea to attend since you can get a good idea of the property and the neighborhood. You can also visit the area at different times of the day. After all, some neighborhoods look very different at night than during the day. This type of research will give you a good idea of the traffic volume, noise levels, and light conditions. You can also check online to view crime statistics in the area and see if there are any major complaints about the area from existing residents. This information can be key in helping to decide whether to bid on a home or not.
- Learn about the bidding process. Bidding at real estate auctions is an entire culture of its own. You definitely should not wait until the auction for your dream home occurs to attend one. Instead, attending multiple real estate auctions before going to the one where you want to bid is a great idea. These visits will familiarize you with the bidding process and help you learn the lingo and strategies for purchasing a property from real estate auctions.
- Understand your finances. Purchasing a home at a real estate auction can be very emotional. But to ensure you make sound decisions, you will want to check your emotions at the door. Therefore, before going to any auction, you will want to understand your finances and know the maximum you are willing to pay for the property. Identifying this amount can reduce the likelihood of getting into a bidding war or bidding above your budget because you fear losing the property.
Purchasing from a real estate auction is an exciting endeavor. And it can be a great financial move if you get a good property at a great price. But it can just as easily be a terrible financial mistake. To prevent this, you must be sure you have researched every aspect of the property and the sale to know exactly what you are getting if you purchase the property. To find local real estate auctions, go to ShoMeMoreAuctions today!