10 Myths of Real Estate Auctions – Myth 2

May 31, 2011

Myth 2 – The property is distressed, something must be wrong with it & I won’t find out until I buy the Property.

It is true that one of the primary reasons a Seller will choose the auction method of marketing, is the benefit of selling the property “as-is,” without contingency upon inspections.

However, this does not mean that the condition of the property is being hidden from the potential buyers. In fact, a reputable real estate auction company will use disclosure forms and encourage the seller to disclose all known defects or issues with the property.

In addition to encouraging full disclosure, a reputable real estate auction company will also give ample opportunity for inspections prior to the auction. This allows the potential buyer to make a determination of value based on their own inspections, or an inspection from a hired professional.

As real estate auctions have continued to grow in popularity, more and more sellers are taking advantage of the benefits of auction, and are considering the auction method of marketing as a first choice, not a last resort.

While it is common to see bank owned real estate auctions of distressed properties, you will also find that luxury homes, unique properties, bread and butter suburban homes, and a variety of different properties are sold at auction every day.


10 Myths of Real Estate Auctions – Myth 1

May 16, 2011

Myth 1 – If I buy a property at auction I will have to produce the total amount of cash on auction day.

Not all auction companies utilize the same terms and conditions, so make sure as a buyer you have a complete understanding of the terms and conditions of the auction.

Most public real estate auctions require a deposit on auction day, and allow 30 days for closing.

The deposit will usually be a flat amount, or a percentage of the total contract price.

Although the majority of the properties that are sold at auction are sold with no contingency, including financing, the 30 days to close allows for most buyers to utilize financing and purchase a property at auction without having to have the entire amount in cash.

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