What Is Good About Real Estate Auctions?

Real estate auctions are ideal to homebuyers who prefer a quick

, hassle-free transaction. Although there are risks associated with this type of house-buying activity, these risks can be easily addressed with the help of a good real estate agent and a well-thought of purchase plan.

The Benefit of Property Auctions

For homebuyers who prefer a fast transaction, buying a house from a property auction is the best option. For one, the winning bidder will have the assurance that he owns the property the moment he is chosen as the highest bidder. In other methods of purchasing foreclosed houses, a seller can still accept offers even when an initial agreement has already been made with a particular buyer.

If a better offer comes along, the seller will be within his rights to accept the better offer as long as no final contract has been signed with another buyer. A verbal agreement is not the same as a signed document, so homebuyers should take note that their offer, despite being initially accepted, does not provide any assurance of ownership.

Needed Preparation

Real estate auctions can offer a homebuyer a speedy process, with the actual auction done in a day or less and closing agreements completed within the usual 90-day period. However, detailed preparations are needed if a homebuyer prefers to acquire his property through an auction.

The first concern is the money that will be paid right after the auction is completed. The winning bidder will be required to pay for the down payment, the auction house fees and other service charges in cash or in cashier's checks right after the auction. No extra days are given to come up with the money since buyers who join auctions are presumed to come prepared to win the bidding war. In some areas of the U.S., an interested buyer will not even be allowed to join the bidding if he cannot prove that he has the ability to pay for the full purchase price.

Buying a home at real estate auctions is suitable to those who have the means to immediately shell out the necessary expenses and those who prefer a quick, fuss-free transaction. However, homebuyers should take note that no one is assured of winning the bidding war so every buyer should come to these auctions prepared.

by: Joseph B. Smith

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