Beginning a new venture, such as investing in property, can be an exhilarating and exciting adventure. As you start doing your research on the subject and asking around for advice, you might hear about the great profits that people make by buying at auction. As with any great reward opportunity, this also has a lot of risks and in this article we will try to inform you more about buying at auction so that you do not make a costly mistake.
It is important to know how the properties get into auction, in order to understand the process better. Jason Hartman likes to inform and teach his audience about his specialty real estate topics, so that they are well equipped when making final decisions. There are two main types of properties at auctions: those which have gone into foreclosure and those on which are owed excessive taxes. The former properties are bank owned and generally sold for a loss, whereas the latter are state or government owned.
Buying at an auction has some disadvantages, such as not being able to get a thorough inspection of the property before buying. However, the advantages include a final sale without a chance of the seller backing out for X or Y reason on the eleventh hour. Researching before attending the auction then becomes very important. Look at the properties beforehand; this is possible since most of the auctions post the properties they will
be displaying at least four weeks in advance. Open houses are a common part of the process, to give prospect buyers a look inside and thus avoid a completely blind purchase. Investing smartly means choosing properties that fit your needs and then finding comparative values around the area. This might be more work, but is well worth it when deciding what the maximum bid will be. When possible, take an expert builder to the open house, because this professional will be able to point out potential problem areas and provide an estimate of cost to fix it.
Here are some tips to remember if you decide to buy at auction. Buying on impulse is not good at the grocery store and it is definitely not good at an auction. Stick to the
properties you have researched and that you know. Set a maximum bid price and do not go over it. It is easy to get carried away with the atmosphere and go over your budget. Remember that a ten percent deposit is required for any final purchases, so have sufficient funds available. Going to an auction and doing a dry run is a great way to see the process at work without feeling the pressure. Finally remember to ask questions, research thoroughly and you will be on your way to finding great properties at great prices. (Top image: Flickr | The-Lane-Team)
The Young Wealth Team