Do Your Due Diligence
Many online auction sites provide a wealth of information on the property page, including maps, estimated resale value and any liens. Be sure you read it all! Its also a good idea to conduct your own due diligence, including a title search, and seek independent advice from a real estate agent or broker, a real estate attorney, or another experienced investor. Unlike live foreclosure sales, most homes sold in online auctions do have an agent commission , which allows an agent to get paid for their services.
As with foreclosures, visit the property if youre local. The real estate agent may even offer open houses if so, bring your contractor with you to help you assess what repairs might be needed.
Can You Buy A House At Auction With A Mortgage
You can buy at auction with a mortgage for some but not all properties. Similar to purchasing at auction with an FHA loan, mortgage lenders have certain requirements in place regarding property condition. Therefore, if you find an auctioned home that does not meet their standards, you will not be able to take out a mortgage on the property. Luckily, as long as the property is in habitable condition, you should not run into any financing problems.
As you may know, on auction day, the winning bidder will typically be responsible for presenting 10 percent of the purchase price. If you are hoping to buy a house with a mortgage, you will need to have the loan details before actually attending the auction. Additionally, mortgage lenders will only approve the loan for how much the property is valued . Keep this in mind as you bid, and you will have no problem purchasing a home at auction with a mortgage.
Why Does Property Go To Auction
There are several possible reasons why a home might go up for auction the real estate auction process will vary slightly depending on why that particular house is going up for auction. However, the two most common reasons a house goes to auction are foreclosure and tax liens.
A foreclosure auction occurs after the previous owner failed to make payments over a series of months and the bank or lender has foreclosed or taken possession of the property. The original lender sells the house in this situation, creating the starting bidusually the amount owed, plus fees and expenses. Auction attendees can then make that bid, or higher, to get the auction ball rolling.
A tax lien auction is similar, but the property is seized due to unpaid taxes or tax fraud. In this case, it is the lien being sold. Whoever owns that lien has the right to collect it from the property owner or seize the property if they are not paid. (Note: Tax lien investing is its own nuanced strategy.
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Tips For Participating In Government Auctions
The general rule for auctions is that the highest bidder wins, and cancellation is not possible. Check with the auction site ahead of time to find out if you can cancel a bid.
Each auction website operates differently. In some cases, the government agency itself runs the auctions. In other cases, the agency operates the shopping site, but a third-party company handles the auction itself.
Find out what forms of payment auctions accept. There is no uniform payment policy across all the different auctions. Some auctions accept credit card payments or personal checks. Others, such as the Internal Revenue Service , don’t accept either of these. Most auctions accept cashier’s checks.
For real estate auctions, you may need to work with a broker or real estate agent to bid or make the purchase. Also, for real estate auctions, find out if financing is permitted. Many times it is not and the full purchase price is due when you win the bid.
Youll Forgo Common Protections
In the vast majority of real estate transactions, home buyers are legally offered consumer protections, lenders are required to make disclosures, and real estate agents must advise you as they would advise themselves. In the auction situation, none of that applies. In addition to having little or no access to the home you wish to buy before you bid, you are responsible for doing your due diligence to make sure the title is held free and clear.
Of course, the mortgage lender, and probably the taxing authority, have liens in place, but you have to make sure there are no other liens, as in the case of a home equity loan in default or unpaid homeowners association fees. If there are, you will be responsible for paying those liens off when you acquire the title to the property.
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Buy Or Sell Real Estate With Ritchie Bros Today
With over 60+ years in business helping hard working farmers across the nation selling thousands of acres of land and farming equipment, you can count on Ritchie Bros. to sell your real estate with confidence. We have a dedicated real estate division with decades of experience combined with exceptional marketing to provide a wide audience reach for your property. If you’re an individual seller, farmer or a business, the Ritchie Bros. Real Estate team is here to help you buy or sell your property.
Can First Time Home Buyers Buy At Auction
First-time homebuyers can buy at auctions, though they should familiarize themselves with the process. More often than not, first-time homebuyers will be going up against real estate investors with more experience in the process. The best way to prepare for this is by researching auctions, attending one or two before you are ready to buy, and asking for advice from someone who has purchased a home at an auction.
According to Really Moving, purchasing a home at auction can save you up to 30 percent on the list pricemaking this an attractive option for first-time buyers wishing to make their budgets go further. In addition to saving money, searching for auctioned homes provides aspiring homeowners with more options in the area. If you want to start looking today, set your budget, search auctioneers websites, and begin looking for potential properties.
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Inspecting An Auctioned Property
Auction properties are sold in as-is condition, and in most cases do not allow bidders to request official home inspections. So, in lieu of the real deal what do you do? The best piece of advice is to assume the propertys condition on the outside hints at what its like on the inside. If the yard and exterior are in poor condition, showing signs of rotting, or more its safe to guess the inside could look similar.
Remember that properties are auctioned after the owners are unable to pay for their mortgages. In these extreme circumstances, it is typically unlikely that the owners had access to fund repairs or even general maintenance. For this reason, many auctioned properties are in an understandably neglected state.
All of this is not to say you cannot do some research. Drive by the property, and consider asking neighbors what they know. Inquire with local real estate agents or past photos when the property has been on the market. Never, under any circumstances, should you trespass on the property. If you are unable to gather any information at all, consider skipping that home for the next one. While your financing may cover extensive repairs, you cannot always predict the depth of the costs you will incur.
Property Condition And Inspections
A house could have all kinds of problemsremember, it used to belong to someone who couldnt afford the mortgage or the property taxes, so the owner probably could not afford any routine maintenance or repairs, either. Furthermore, once the loss of the home appeared inevitable, the owner may have intentionally neglected it or even seriously damaged it. Also, a vacant property may have been vandalized or occupied by squatters.
Assume that if the property looks terrible from the outside, it probably looks terrible on the inside. Auction properties are sold as is, and you will need to be able to afford any and all repairs. Tempting though it may be, you should not trespass to get a better idea of the propertys condition. You may have seen flippers on TV entering backyards, peering in or even climbing through windows, but doing so is illegal, and you definitely dont want to disturb anyone occupying the home, not only out of courtesy but also for your safety. Seek information about the propertys ownership history from local government records, talk to local real estate agents, and respectfully request information from neighbors.
Even if you can get a home inspection, that still has its limits. Problems behind walls, in ceilings, and under floors might not be apparent until you take possession. If the utilities are turned off, you may not be able to detect leaks, electrical problems, broken appliances, or malfunctioning HVAC equipment.
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Attend The Auction And Bid
Check-in at least one hour before the auctions start. Get an Auction Bidder Card and raise it when the auctioneer announces a price that youre prepared to accept as your winning bid.
If you win the auction, your payment is due immediately or the following business day . Once youve paid in full, youll complete a certificate of sale or an execution of sale receipt, deed upon sale and IRS Form 8300, subject to state-specific laws.
Find And Track Foreclosure Auctions
If you are looking to buy a foreclosure home, consult an online resource like RealtyTrac or Auction.com to find foreclosure auctions in the area or areas in which you want to buy. Remember: After creating a free account at Auction.com, you can easily view which foreclosure homes are for sale near you. If you find something you like, save it to your favorites.
Foreclosure sales data is usually available from the specific county either online or at the county courthouse, or from the third-party foreclosure sales agent, often called a trustee. You can also work with a local real estate agent or broker to identify these foreclosure properties, but you should know in advance that, by law, there is no agent commission on these sales.
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Farm Homes & Farmland For Sale
We’ve helped farmers sell their farm equipment & farmland for over 60+ years. At our farm auctions, you’ll find complete dispersals of land or land and equipment. You’ll find large sized acre farmland from 40 acres all the way up to 200+/- acres.
Farmland comes in many shapes and sizes and we have experience selling it all. If you are looking for a hobby farm or multiple quarters to build your agriculture business, Ritchie Bros. should be your first stop. Not only do we sell farmland to cultivate crops but we have inventories of pasture land. Ritchie Bros. provides you with as much information that is available for every parcel that we sell – title acres, crop history, drainage, cultivated acres, soil type, fencing, grain handling systems – just to name a few, so you’ll find farmland that’ll suit your needs.
The Advantages Of Buying A House At Auction
There are several potential advantages to buying a house at auction:
Potential For A Discount
Quick Settlement Times
Some Houses Boast A Lot Of Potential
While some houses will be priced higher than they are actually worth, and some will be too damaged to make them serious candidates for restoration and renovation, there will also be properties where the opening bid is a fraction of what the property is worth. There will also be undervalued properties where they are priced about right, and could be worth much more if properly renovated.
From an investors point of view, foreclosure and lien auctions offer the opportunity to invest in one or more of these properties at a low price. After some work, they can then sell or rent those properties for income. Most foreclosure auctions give the additional benefit of offering potential buyers ample time to visit each property, do research, and make a list of which ones interest them.
Another benefit is that there isnt an extended time of negotiation or back and forth with a seller. This is a one-time auction the winning bid is the winning bid. There are no other changing amounts, negotiations, or fees. A bidder lines up payment, perhaps through private money lending or raised cash, and then owns the property.
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Buying A Home At An Online Auction
In an online auction, you wont find yourself standing on the steps of the county courthouse or packed into a hotel ballroom. You could be anywhere when you bidat home, the office, even an airportas long as you have an Internet connection. Bidding can occur 24 hours a day over the course of days or weeks, instead of on a single day.
Online auctions also broaden the types of properties you can bid on: short sales, non-distressed, bank-owned homes , and commercial property and notes.
The steps for bidding in an online auction are similar to a live auction.
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Drive By The Property If Possible
This will let you see the homes conditionfrom the outside. Homes in the foreclosure process are usually occupied by the owner whos being foreclosed upon or a renter. Do not trespass or disturb the occupant! Doing so is a criminal offense.
When you bid on a foreclosure, youre bidding on the property as-is. You wont know what condition youll find inside once you take possession. Extra, unexpected repairs could cost you thousands of dollars, so take that into account when figuring out how much you can comfortably bid. Theres a saying among investors thats a pretty good rule of thumb: How it looks on the outside is what its going to look like on the inside. In other words, an unkempt exterior indicates an unkempt interior, while a home with great curb appeal will probably look similar inside!
And If Youre The Winner
Be ready for things to move fast. With Auction.com, for example, the contracting department will contact you within two hours and walk you through the online purchase and sale agreement, which shows the total purchase price and the timeline for submitting documents and payments. Make sure that escrow receives your documents and payments on time otherwise, you could lose your earnest money deposit.
Look closely at the property page for each property you are planning to bid on. Many properties have whats called a buyers premium, which is the fee charged by the auction company for conducting the sale, from marketing through the closing. The amount can vary, but its usually 5% of the winning bid amount. Many properties dont have a buyers premium because the bank or seller has arranged to pay this fee out of their proceeds from the sale.
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Research Properties Before You Bid
We are not responsible for the condition or quality of the properties being offered for sale. We recommend that you research each property.
It is important to determine whether there are other restrictions, charges or conditions that may affect a propertys value or sustainability.
Please do not trespass onto the properties being offered for sale. It would be an infringment on the owner’s right.
Finding Real Estate Auctions
One way to find auctions is by contacting local governments directly or visiting their websites for information and then following up by phone to confirm the details. Another is through sites such as RealtyTrac.com and Auction.com. However, online information is not always accurate.
Properties may be listed that are in pre-foreclosure, because the owner is behind on payments. These properties may never go up for sale because their owners catch up on payments or come to an arrangement with their lenders.
Local real estate agents and brokers can also be valuable resources. Unfortunately, you may not find them eager to help, because agents and brokers do not automatically earn commissions on live auctions. However, these realtors can earn commissions through online auctions.
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Parksville Ky: Coin Jewelry & Knife Collection At Absolute Auction
Bidding Ends Friday, Novemeber 4th, 2022 at 6:00 PMLOCATION: 1st Evolution Auction House at 10735 Forkland Rd. Parksville, Ky 40464
PREVIEW DATE: Friday, November 4th, 2022 from 12:00 noon to 6:00 p.m.
PAY / PICK-UP DATE: Saturday, November 5th, 2022 from 12:00 noon to 6:00 p.m.
Buyer’s Premium: There will be a 10% Buyers Premium added to the winning bid. The sum of the winning bid plus the Buyers Premium will be the sales price.
Online Auction Ending Times:
Ford Brothers, Inc. Online Auctions are timed events and all bidding will close at the specified time. Ford Brothers, Inc. Online Auctions also have an auto-extend feature. If a bid is placed in the final 5 minutes of an auction, the close of the auction will be automatically extended 5 minutes from the time the bid was placed. For example: if an auction scheduled to close at 6:00 receives a bid at 5:59, the close time will automatically extend 6:04. The auto-extend feature remains active until no further bids are received within a 5-minute time frame. Please monitor the countdown timer to see when the lot will close.
Payment, Pickup, Shipping & Storage Terms:
Large Item Pickup: Ford Brothers, Inc absolutely DOES NOT provide shipping, shipping preparation, or transportation services for any items larger than the size of the largest U.S. Postal Service flat rate box. Removal of items, moving, packaging, loading, transporting, shipping, and shipping preparation are the sole responsibility of the purchaser.