Of course, there are ways to circumvent some of those steps. One option can be purchasing a home at auction. When investing in a house at auction, it’s a whole different ballgame. Sometimes, people can’t tour the interior of the home before buying. Nor is there an inspection. It can be a risk.
Auctions are also attractive to prospective buyers because of the possibilities. Everyone in real estate has heard a story of someone scoring a diamond in the rough at an auction. Many people walk into an auction hoping for such a circumstance. However, it’s less likely to happen than most people would like to admit.
Competition for homes at auction can be fierce. Seasoned investors know exactly what they’re looking for. They also know the ins and outs of the real estate industry. It can be hard to go up against them in an auction. They may not be interested in homes themselves, but rather, the land they sit on. Anyone looking to score a habitable home at an auction should be cautious.
Homes going to auction generally have big problems. They’re generally up for sale because the prior owners fell behind in their mortgage or property tax payments. What’s more, the housing crisis of 2008 made the general public more aware of property auctions than ever before. So many people are heading down this route that buying at auction may not even lead to the steep discount it once did. This is particularly true for foreclosures in good condition.
Finally, it can be hard to even find properties for auction. Attractive pre-foreclosures sometimes don’t even make it to the auction date, if the owner finds a fix. Online property auctions are becoming more popular. Real estate agents can earn commission on these sales, unlike the traditional live auctions that take place in courtrooms.