Six Steps to Navigating a Real Estate Auction

Real estate websites

If you are looking at real estate for sale but can’t quite find what you are looking for, you way want to consider heading to a couple real estate auctions with your real estate agent to find your dream house.

Real estate auctions are a quick and easy way to secure a home in no time without the hassle of having to negotiate prices with the owner, nor will you need to pay a real estate company for helping you find a house.

Here is the six step process to buying a house at auction:
Step 1: Find properties. Look up houses on real estate websites that are for sale. Be specific in what you are looking for. For example, if you are looking at luxury homes for sale, be sure to search that. There were over 2,800 listings in Iowa in April 2014 — so narrow things down a bit.

Once you find a property, go see it in person. Drive around the area, make sure it is in the condition the online listing says its in and what the neighborhood is like. You may even get a chance to meet the owner or gather information from a neighbor.

Step 2: Confirmation Information. Sometimes the owner of a property headed to auction can cancel or postpone the date. Real estate auctions will always let you know the day of the originally scheduled auction that they have cancelled. Your real estate agent may also be able to tell you this information before you head to the auction. Real estate agents should also provide you with evaluative information about what other real estate options you have and should help negotiate a deal when buying a home.

Step 3: Check for a Bargain. Before heading to any real estate auctions, find out as much information as you can about the property you are interested in. What is the market value? The median sale price for Iowa homes in April 2014 was $127,000 — know the average home prices in your area. Ask yourself if the house will be overpriced; median home prices fell 3.2%, or $6,000 last year.

Step 4: Set Your Amount. Based on what the home’s initial asking price is, you should determine the maximum amount of money you are willing to pay for the home at auction. By setting a strict maximum spending amount, you will most likely prevent yourself from getting caught up in the auction atmosphere. Also, bringing your real estate agent along could help keep you in check.

Step 5: Make the Bid. Once you arrive at the auction site, talk to as many other people as possible about how this particular auctioneer functions and how the whole process works (if you’ve never been to an auction before). However, be sure not to let them tell you how much to bid — they may be after the same property as you and will tell you “that house isn’t worth it,” only to bid on it later.

Step 6: Own It. If you end up winning the house you wanted, make sure you acquire all the essential documents from the auctioneer. You want the fact that you won the house in writing. Ask the auctioneer and real estate attorney what else you need to do in order to secure the property. Sometimes, you may be able to walk away from the auction with full ownership of the house, other times it may take a few days. Find more on this here.

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