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.
- Research the auction site
You need to determine that the auction platform is trustworthy and established.
- 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.
- 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.
- 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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by Karl Adams
Auctions represent an unusual way to purchase real estate. This method offers the potential for obtaining real estate at well below market prices. An investor can often make a sizable profit from a real estate auction combined with minor and/or major renovations to the property. However, real estate auctions also come with the risk of paying too much for the property or discovering that a ‘minor renovation’ is really a Pandora’s box. So how do you ensure that you get a good deal from a real estate auction?
Thorough preparation is the single biggest thing you can control to ensure getting the best deal. Adopting the Boy Scout motto as your own helps you at every stage of the process – locating properties, conducting a property background search at sites such as propertysearch.net, scouting the property, assessing the property and purchasing the property.
Locating the property
Even in rural areas, there are several property auctions that buyers can identify by searching on-line auctioneers’ websites, local newspapers or county bulletins for tax-lien and/or Sheriff’s sales. Larger cities often have a mixture of residential and industrial properties available at auction—so it pays to know what kind of property you’re interested in purchasing.
If you’re interested in a residential property auction, make sure you look at several nearby property sales to get an idea of the neighborhood comps. This will help give you a ballpark idea of what your property might be worth
Once suitable properties have been identified, you need to conduct a property search. This normally applies to Sheriff’s sales and estate sales—you need to know whether the property has a lien associated with it or whether it comes with a clean title. Knowing this can save you both time and money.
If possible, visit the property to examine the its condition. Look for potentially major repair expense issues like a cracked foundation, a leaky roof, electrical, plumbing and/or HVAC issues. Some properties may be boarded up so you can’t assess the inside. However, there might be a designated time for an inspection prior to the auction. Make sure you attend the inspection if there is one.
Use this inspection to assess the interior condition and get at least a qualitative idea of the scope of any repairs and/or renovations necessary. This assessment, combined with the neighborhood comps (which gives you an estimate of the property’s full value), should give you a good maximum value you’re willing to pay for the property. That helps you to…
Keep your emotions in check!!
Auctions are intense and it’s easy to get carried away. They’re designed to make buyers a little irrational. Buyers can develop an emotional attachment to a property even before the bidding starts. Combine that with bidding during a fast-paced auction and it can quickly escalate into something personal with another bidder—who’s trying to take ‘your’ property. Don’t fall into that trap!! Keep your emotions in check, set a maximum value for the property and stick to it. Sure, it’s disappointing to lose an auction, but it’s far worse to lose money on an investment just because you took leave of your senses for a few moments.
Final take—Be prepared, do your homework, set a limit, stick to it and check your emotions at the door!