What to Expect at a Real Estate Auction

Real estate auctions are a great way to get started in real estate investment. While it is important to know the pros and cons of buying at auction, it is also just as important to know what to expect when you go to a real estate auction.

Auctions are the public sale of property. Homeowners, banks, the government, and private auction houses can put a property up for auction. This gives buyers the opportunity to purchase property at a fair market value due to competitive bidding. While there may be risks, doing your research will benefit you when it comes to bidding at the auction.

At a real estate auction, you will see multiple offers. Each bid is an offer to buy, and the price is determined by the highest bid. Auctions usually have a starting bid that’s based on the total amount owed. The highest bidder wins the sale. Once the auction starts, bids can increase quickly. If the initial bid isn’t met, the lender or government may hold the property to sell in another way.

It might be a good idea to research the venue ahead of time. You will want to know where the bidding will take place. Auction.com suggests downloading or printing a map, determine where you can park, ensure electronics are permitted, and determine whether the bid will be conducted in person or online.

Arrive at least 30 minutes before the auction starts. This will give you time to check in, register show proof of funds and get your auction bidder card (if applicable). You will also want to bring identification. It is important that you bring a driver’s license, passport or another government form of identification.

You should know the maximum amount you will bid, and walk away if the bid rises higher than that amount. You will also want to be prepared to pay a sales commission that is usually 20-50% of the sale price. You should take all of that into condsideration when bidding.

You will get limited knowledge of the property. Properties are usually sold as-is, and there are no inspections before you buy. You will be responsible for any issues found on the home after the purchase.

Whether you are planning on buying for the first time at auction, or just interested in learning how auctions work, it is good to have some basic knowledge about auctions and how they work, and know what to expect! Landhub offers a great source of information as well as auction listings that are currently available.

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