Foreclosure auctions have grown in popularity since the downturn in the real estate market. With huge numbers of homes in foreclosure, these auctions became an efficient and expedient way for lenders to sell repossessed homes and get their money. The auctions focus mainly on selling to investors as the general public normally cannot meet the terms of the auction purchases which can range from a 10% deposit with the balance due in 28 days to full payment in cash on the day of the auction. What the auctions do offer is the opportunity to bid on several homes and the promise of a sale price that is normally below fair market value. You will want to know a few tips to ensure that you get a good deal when buying at an auction.
Information on the properties up for auction is critical. You will want to research them all in detail and have a qualified assessor determine the value of each property. You will also want to learn all that you can about the general area around the home. It is important to know if there are plans for future development in the area that could have a big impact on the property value in the future. If in your research, you find a bit of information that was not common knowledge and could impact the property value, then keep the information private and only for your use. This can give you a big advantage during the bidding process.
Before the bidding begins, set a budget for each property. Know that you cannot bid in excess of that number or you risk losing money on it. The bidding process can be very fast paced, exciting and competitive, but stay in control and remember that this is just another business transaction. It is not an activity for fun, sport or to prove your prowess. Leaving with nothing is far better than leaving with a property that you overpaid for and are now going to lose money on. It’s just business.
If you are new to real estate investing or to the auction process, it is a good idea to visit a few auctions to learn the process and get comfortable with it. It is also very smart to attend with a mentor who can explain the finer points to you and impart their advice. But by far the most important part of making you first real estate investment purchase is your realtor. Having the guidance of a professional will help to insure that the process goes smoothly and that you are in a good position to make a profit from your first purchase. Consulting with the team at Arizona Real Estate Wholesale is a good way to learn about the business and the advantages of using a realtor to protect your interests.