A real estate auction is most frequently used after a home has been foreclosed on and also a lender owns it. An auctioneer is utilized to accelerate the purchase procedure and, as the bidding progresses, a sensible average market value for the home prevails. This may be a intimidating way for a beginner to buy a home, so it might be helpful to ask questions before bidding on a home in auction.
Who Owns The Property?
Even though there’s the occasional auction held for a privately owned home, many houses in auction are owned by mortgage lender that have foreclosed on properties and wish to recoup some of their money they’ve put into them. Banks are not in the company of owning houses, and do not need these properties on their books, so that they sell them .
Can I Inspect Before I Bid?
You absolutely should inspect a property before making a bid on it. Take a home inspector or contractor with you for the very best possible sense of just how much it is going to cost to create the home fully habitable. Additionally, make sure you read and examine property information, such as all of the disclosure documents that pertain to the home. The home won’t be available for review following the auction, so do your due diligence before the first bid.
What Can I Bring To Auction?
If you plan on bidding on a property you must have a cashier’s check made out to yourself in the sum that has been given by the auction company. Using a personal check, you will also be asked to pay a 5 percent earnest deposit on auction day, in addition to any other sales fees asked by the auction company. You may contact it before the day of this sale to understand just how much the particular fees amount to. Make sure you have a valid photo identification with you that the auction company may be sure of whom they’re working with.
What’s a Buyer’s Premium?
One of the fees collected from the winning bidder is referred to as a buyer’s premium. This money is used to defray the auction expense costs so that they’re not passed on the vendor. The fee amount varies from company to company, but is generally approximately 5% of their winning bid.
Can I Secure My Own Financing?
Though you can arrange for your own financing, you will need to present the auction company with a written unconditional lending commitment by the lender on the day of this auction.
What Do “Cash Only” Mean?
A”Cash Only” auction is one in which a purchaser must be able to spend money on the property without the assistance of a mortgage lender. The auction company will verify assets like bank account, 401Ks, IRAs, CDs, mutual funds and stock accounts to be sure that you have access to sufficient money to pay for the purchase.
When Can I Get Title?
Closing generally occurs within 30 days of this auction. You are going to get title upon payment of the purchase price and closing prices.
What Happens If I Change My Mind?
You can’t cancel the transaction. As soon as you’ve agreed to purchase the property, it is your’s. There’s no cooling off period or chance that you reconsider. This simple fact makes it especially important that you run your due diligence before the auction so that you completely understand what you are getting into.