Most buyers look for houses for sale in online marketplaces and real estate platforms. These sites offer a vast array of listings of houses with prices ranging from the most budget-friendly to the most expensive. Buyers can also narrow down their searches by choosing their preferred location and budget.
While online sites offer great houses for sale, some buyers look into auctions in the hopes of scoring a better deal. Auctions may present houses and lots that are cheaper than the most budget-friendly listings online. They may also give you the chance to avoid the lengthy and uncertain process of buying their dream home.
However, the “good deals” buyers get from houses sold at auctions may come with other factors that might not suit their preferences. Here are four things you must consider before buying a house at an auction.
The Auctioneers and Their Properties
Like online shopping, you have to research and learn about the auctioneers and the properties you are eyeing. You can also search the locations on your home-hunting list and check whether there will be auctions in those areas. Schedule these auction dates and arrive earlier so you can assess which houses for bidding suit your taste. Being early will also help you avoid missing the best auction deals.
It also helps if you check for the auctioneers’ qualifications and licensure to list houses for bidding. Also, check if the seller has full rights to sell the property listed on auction. The last thing you’d want is to purchase a house from an auctioneer who isn’t licensed and have the authorities at your tail.
When planning to buy a house at an auction, expect that many of the properties are foreclosures. These homes are auctioned as a way for banks and housing agencies to unload them, such as the Pag-IBIG foreclosed properties for sale in the Philippines.
Keep in mind that most foreclosed properties are sold on an “as-is” basis, and they may require renovation that you will shoulder after the purchase. It is best to check the houses’ photos and ask auctioneers about any damages that need repairs, and assess how much those repairs will cost to know if the property is still worth purchasing.
Possibility of Viewings
Houses sold in auctions are less likely to have viewings and visits. This will be hard for buyers who want to inspect the property thoroughly before setting their purchase in stone. If you want to avoid buying a house that needs costly repairs, negotiate with the sellers if viewings and tours of the property are possible. If not, then cross these properties off your list and move to the next ones.
Some houses sold in auctions allow buyers to apply for a pre-approved home loan to determine their purchasing means and to get the property they like. On the other hand, in some auctions, buyers should pay the full sale price after winning the bid. Depending on the auction you’ll attend, you might have to bring a hefty sum and perhaps a part of your life savings to purchase the house you’re bidding on.
Overall, auctions are ideal venues for buyers to find houses sold for bargain prices. Still, considering these four things before buying will save you from losing money.