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Buying a Home Through an Online Auction – Are You Ready for This?

buying a home through an online auction – are you ready for this?

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Published date:

July 19, 2018

Last updated date:

April 25, 2024

By Manny Manriquez

There isn’t much that you can’t buy online right now and that includes houses. Smaller online purchases are pretty routine and they don’t make most shoppers nervous. At least not if they require small transactions. New shoppers worry more about the protection of their personal information. But, when it comes to a high ticket item like a house are you really ready for this?

Who Sells Their House Through an Online Auction?

This is not just a rare occurrence. There are several sites that have now been developed for buying and selling houses. The types of homes that can typically be seen up for auction online are;

  • Foreclosed homes
  • Bank owned property
  • Investor owned homes
  • Flipped homes

Depending on the circumstances of the sale quite often the homes are in need of repair and are sold “as is”.

Is it Safe to Buy Homes Online?

The answer to this is it all depends. There are reputable sites where making the financial transactions is secure. But, buying a house online can come with a lot of risks that also influences safety factors.

Do Your Homework

If you are going to venture into a buying a home online adventure you have a lot of work to do. Yes, it is convenient that you can sit at your desk or use your mobile to do this, but there is still work to be done.

  1. Research the auction site

You need to determine that the auction platform is trustworthy and established.

  1. Learn how the platform works

It will require some research as to how to navigate around the site and the process for placing bids. Most importantly you will need to read the terms and conditions carefully.

  1. Research about the property of interest

When you find a house that you are interested in bidding on there will be a certain amount of information about it on the site. Read all of the documentation about it very carefully. If possible try to find out more about the house from other sources. It may have been listed elsewhere.

  1. Have your financing in place

You will be expected to submit a specified amount of money with your bid. Then if you win the bid you are going to have to have your financing in place when the bid closes.

Think About Using a Professional

Although people do buy and sell houses without the use of professionals like real estate agents it can be nerve wracking and a lot of things can go wrong. One really needs to be experienced at these types of transactions. If an individual really finds a house at an online letting agent auction they are interested in they may want to use a realtor to assist them with then the bidding and closing.

A Better Alternative

If selling and buying a house through an online auction were all that simple and successful there would be a whole lot of success stories on the internet. But, much of the information is outdated when it comes to the “stories” and there is nothing notable about the successes for the average house buyer. Most people are looking at house auctions online because they are looking for a good deal. There are much safer ways of doing this. Looking at areal estate portal that specializes in real estate of all types and all prices, which covers the entire US gives much better and much safer choices. Here are a few examples:

How About a Single Family Home? Under $25,000?

Where in the world could one possibly buy a single family home that is in decent condition and livable? The answer is right in Chicago. It may need some tender loving care, but at the price one can afford it.

A Three Bedroom Home Under $5,000? No Way!

For less than what one normally puts out as a down payment could actually make one a homeowner that would be mortgage free. There is such an opportunity in Dayton, Ohio. The market value on this 3 bedroom is much higher than the asking price. These are just two examples of many of how those that are in the market for cheap houses have other options. Ones with much less risk than buying at an online auction may create.

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