Real estate auctions offer buyers the possibility to purchase a home, commercial building, or piece of property at a much discounted rate. However, before attending a real estate auction, buyers should understand the three main differences in real estate auctions.
1. Foreclosure Auction.
A foreclosure auction takes place when a property has been seized by a lender for non-payment. These auctions take place at the home or property on a specified date. Buyers have the ability to look over the property or structure on the morning of the sale. Opening price on these auctions will be for the amount owed on the loan. In many cases this is below market value. However, it is up to the buyer to know what local real estate prices are to determine if the auction price is a good deal.
2. Sheriff’s Sales.
These auctions take place when a government entity seizes a property for back taxes. The Sheriff’s Office will conduct the sale at the local courthouse on a designated day each month. All properties seized during that period will be available, but there is no guarantee on any specific property. Owners have the right to pay their back taxes as late as the morning of the sale. You can purchase property and homes very cheap at these sales. However, when you take ownership you will be legally obligated for any debts attached to that property, evection of the residents if necessary, and any damages to the home.
3. Bankruptcy Auctions.
Many people do not realize that the U.S. Bankruptcy Court holds regular auctions for property, homes and commercial real estate in addition to sales of personal belongings. You can purchase these homes and properties at a very reasonable price. Each court has their own time set for auctions so you must check with the local court to determine date of next sale. One benefit to these types of purchases is that there will not be any debt attached to the property.
Every real estate auction will require the buyer to have a cash deposit at time of sale. Depending on the type of auction you attend, you may have from three to thirty days to pay the remaining balance of the winning bid.
Buyers should review the terms of the auction prior to the sale. In many cases, such as with an auction in tennessee, the auction company will only accept cash or a certified check. Most auctions will not accept money orders or any form of credit card for the deposit.
Hayley is a freelance blogger. Click the link for the premiere tennessee real estate auction listings on the internet.