Home > Mortgages > 5 Things to Do Before a Home Auction

Comments 0 Comments

Discovering how much house you can afford can be complicated and oftentimes, disappointing. Homes are expensive and usually require quite a bit of money upfront. But there are some options for buyers looking for a bargain. If you are considering buying a distressed property, it’s important to learn about the home auction process. Check out the five things you should know before heading to a home auction so you are an educated buyer on your way to getting a great deal.

1. Know What You’re Getting Into

It can be a good idea to locate property auctions in the area where you want to buy so you can attend several “practice sessions.” This is when you go to just watch and see how the process works. Read the terms and conditions, pay attention to the auctioneer’s selling practice and how he or she calls for bids. When you find a property you would consider buying, try to check it out in person if you can. Compare the price and condition of the property to similar ones available through real estate agents and online tools. Then decide on its true market value so you can bid accordingly.

2. Contact a Real Estate Lawyer

Since buying a home at auction is risky, it’s a good idea to enlist the help of an attorney who specializes in these kinds of transactions. If the sale is a foreclosure, the property may come with unpaid tax bills and property liens. While the auctioneer or property owner is legally responsible to disclose this information, an attorney can help you understand what it all means for you.

3. Come Prepared

It’s important to do some work ahead of time. Get pre-qualified for a mortgage from a lender so you know how much you will be able to borrow. When you arrive to the auction, you will have to register so be sure you have identification and enough funds for your down payment and fees. Requirements vary state to state but many auctions require a certified check to prove legitimate intent. Look into your state’s requirements.

4. Don’t Get Caught Up

Your heart rate will likely increase while the bidding heats up, but it’s important not to let yourself get carried away. Have a maximum price you are willing to pay in your head and stick to that budget. Even if you invested a lot of time and effort prior to the auction researching properties, it is not worth it to overbid. If you don’t trust yourself, you can try sending someone else to do the bidding for you.

5. Check Everything

Properties often do not allow tours before the auction is sold, so it’s important to check all your terms carefully. You will likely want to do a full title search on a property and pay attention to any special announcements made at auction that affect the cost.

More on Mortgages & Homebuying:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team