A lot of real estate is just about making sure you put out the best bid for the best property. So why not streamline the process and buy land at auction instead of through more traditional routes?
There are several big perks to buying land at auction. And if you know what you’re looking for and have the cash to spend, it could be the easiest way to quickly close a deal on a great property.
Here are the benefits of going the auction route when buying land, plus a few things to keep in mind as you head into the process.
Benefits of buying land at auction
Real estate auctions offer benefits for both land buyers and sellers and could be the way to go if you’re in the market for a property. To get a feel for just how much you have to gain, consider these major perks to bidding your way to a land deal.
Once a property is on the auction block, it’s ready to be sold. That means no uncertainty regarding the seller’s intentions or whether they’re fully committed to the sale.
Land is listed for auction at fair market value, and it’s the interested buyers who determine just how far above that price a property ultimately goes for. Bidding can certainly get competitive, but because of the nature of the process it’s very unlikely that you’ll end up spending more than the true value of the property.
No back-and-forth negotiations
Negotiations do have their place in real estate transactions, but not all buyers are interested in the hassle that comes along with them. Auctions eliminate the need for time-intensive and stressful negotiations, laying all the cards on the table from the outset so you know exactly what you’re getting (and what you’re not).
Reduced closing times
Auctions greatly speed up the land buying process, which is good news for buyers who aren’t looking for a drawn-out sale. If you know that you’re financially and logistically ready to close, an auction will allow you to minimize the timeline and get the proverbial keys to the property a whole lot sooner. As an added bonus, you’ll know the purchasing and closing dates upfront for complete transparency on what to expect as far as timing goes.
Preparing for a real estate auction
To make the most of a real estate auction, it helps to go in prepared, particularly when it comes to the basics. Here’s where to start.
- Know your auction terms – There are three big terms to know before heading into a real estate auction: absolute auction (the seller will take the highest bid no matter what), minimum bid auction (a minimum price is set for the property as a jumping off point), and selling with reserve (the seller maintains the right to reject any or all bids).
- Know your finances – Many auction companies require you to pay a cash deposit upon winning a bid. They may also require a cash payment to participate at all. Know how much you can spend total on a property and how much cash you’ll have available, and contact the auction company in advance to find out what their policies are.
Do plenty of due diligence ahead of the auction so you know precisely what you’re looking for and what you can spend to get it. Then snag your seat and may the best bid win!
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