What advice can you give about buying a home at an auction?  Buying property at an auction is not for everyone.  The auction is a fast-paced environment and there is a tendency to get carried away.   However, an auction does allow you to experience a quick purchase and closing.  Although you are not required to have a Realtor to bid, it is a good idea to get the assistance of a Realtor early on in the process to assist with property viewing, information and valuations.

There are basically three types of auctions:

Absolute: The highest bidder wins the auction, regardless of price.  This is the same as an auction without reserve.

With Reserve:  The seller has set a reseved price for the property.  It can be different than the minimum bid.  The seller can accept or decline a winning bid within a specific amount of time after the auction.

Subject to lender approval: The lender must agree to sell the home for the amount of the winning bid for the sale to take place.

Before you go to any auction, make sure to read the auction’s terms and conditions sheet and the contract carefully so you have a good understanding of the bidding process.  Additionally, be sure to inspect the property thouroughly as most properties are sold “as is” “where is.”  Do your homework by researching the neighborhood and comparable sales so you don’t find yourself bidding more than what the house is worth.  Bring all the required documentation to bid.  Most auctions require a bidder to put up a cashier’s check for a certain amount to show that they are serious. Finally, make sure you get preapproved before registering to bid at an auction.  You need to know what your maximum bid is, because once you win a bid if you cannot secure the financing you will lose your deposit. 

Whichever type of auction you decide to go to, keep in mind that not everyone who wins end up with the property.  Avoid making costly mistake by reading the fine print, getting informed and being prepared.