How to Win Online Real Estate Auctions
With real estate auctions on the rise, technology is beginning to play a role. The convenience of online auctions is changing the way we buy and sell homes. Real estate auctions are beneficial to both sellers and buyers, adding a convenience and efficiency to a process that normally makes you want to pull your hair out. At Fortna Auctioneers & Marketing Group, we take the stress out of buying and selling properties, making it a great experience for everyone involved. Being prepared for an online auction is the first step to being successful.
1. Have an investment strategy. What do you want to achieve going into this auction? Are you looking for a single residence, family home, business property, or are you going to flip this property? Know your intentions and what you are looking for.
2. Line up your funding. How are you going to pay for this property. Most properties do not provide financing, meaning that you will pay the entire cash amount. Also, you may need to provide proof of funds, entity documents and earnest money deposits. Be prepared to pay a “buyers premium,” issued to the winning bidder, typically as a percentage of the closing bid price.
3. Do your due diligence. This step is important especially when considering a foreclosed, bank owner property or short sale. Always review the preliminary title report. You will find one of these on any foreclosed property you’re interested in buying. Learn who owns the title and whether you have the right to purchase. Be looking for secondary liens and tax liens. Also hidden liens or encumbrances on the property that will blossom into unpleasant surprises later.
4. Inspect the property thoroughly. The beauty of online auctions is that living or being nearby is not a necessity in order to be involved. So inspecting the home for yourself may not always be an option, hiring a local inspector is an option if the house is in fact open to the public. On the downside of a home being foreclosed, you may not have access to view the inside, so visit the outside to give you some visual evidence of its history.
5. Register for the Auction. If you are serious about the auction and would like to participate, you must register and pay a possible deposit.
6. Stick to your price range. Always set a maximum that you are willing to pay. Do not get caught up in “auction fever” and bid more than you intend or get caught up in a bidding war just because you want to beat that other bidder.