It is a sad fact that many home owners cannot afford to pay their mortgages. At the end of the day, banks re-possess those homes where payments are not met, and although sad for those who lose their homes, this opens up a whole new area for people to be able to buy home for less expensive prices, bearing in mind that most financial institutes really don’t want a portfolio of houses to finance and are pleased to get rid of them at auction in order to alleviate costs.
All over the world, the story of the repossessed housing market is booming and this gives a chance for people to realize their investment in a home at a reasonable price at auction. The kind of people interested in auction properties will be:
If you really are interested in buying a house at auction, there is much preparation needed to be made in advance of the auction date. Inspecting a property is one of them, although only a very small part of it. Having a surveyor look at the home is very wise as well because this gives you an idea of what the home needs done to make it livable in. Employing a structural surveyor to inspect an auction property needs to be done pretty rapidly as these houses move fast, and certainly cannot hang around while you are just thinking about it.
Another thing that needs to be done in advance is to arrange finance. If you do not have finance in place for the purchase of an auction property, you are not in a position to make a bid, and auction houses will not entertain waiting. Sorting finance can mean a trip to the Bank or to a lender but a written offer of finance is essential so that you know when you bid that you have the money to pay for the home.
The advantages of auction homes is that you are likely to get a home cheaper than you would on the open market. The main disadvantage is the time element and setting your purchase into place not knowing what your competition is. Having a survey does cost money, though better safe than sorry, as you could be tempted to up your bid on the property at the last minute without any kind of knowledge as to what the property will cost to renovate.
Buying government owned property is also a very real possibility. Here, the purchaser must be in contact with a real estate agency who will work hand in hand with them through the process. The amount of homes for sale is enormous in all States across the United States, but the rules are the same for all states. It is the real estate agent acting for you that will make your bids, and they will have checked to see if your finances allow you to bid. Trusting the professionals here is essential since it is their job to make sure that the sale goes through smoothly.
If your bid is successful, you will be notified within 2 days, though for more information on how this system works and the properties available, together with rules, do visit www.homesales.gov who have all the answers. Do look out for the disclosures that appear next to each home since these are important and will pinpoint any structural known problems that you may need to take into account upon purchase.
The development of auction properties is so popular now that it even has the name of Flipping. What this means is that developers buy property, renovate it and sell it on at a profit. It sounds pretty easy doesn’t it, although here many people are making the mistake of not knowing sufficient information at the time of auction, and thus making expensive mistakes.
A visit to properties to determine the level of expertise needed to develop the home is essential and what is being found worldwide is that people are buying defective homes without the expertise or finance to invest in them to make their investment work.
Again, developers need the cash to buy the auction houses, though they also need expertise and planning capability to help them decide if the house is indeed a sound investment and will give returns. Here, the price paid at auction should take into account the cost of repairs, and the eventual sale price of homes in a good state of repair within the area where the home is situated. All too often without doing their homework, developers are stuck with homes they cannot afford to repair or set their sales estimates too highly and do not make a profit.
Developers should research the market before buying at auction, should have a list of prices of estimated repairs, and also know the market value of a house in the same area that is going to be competition.
It may not be well known though in France, auctions are very different to auctions in other countries, and are held by candle light. It’s an interesting experience and one where time means everything. People bid for foreclosures and the person that wins is the one with a bid in place when the candle goes out !
Buying foreclosures means that first time buyers have the chance to get onto the property ladder at prices that they can afford, though prudence is important since a home is a large investment. Taking the right advice from professionals is essential to success. Knowing your limit at auction can only be determined by being aware of costs that will be required to renovate the home is a first step towards success in the housing game, and really can pay off.