Auction sales have been gaining traction in all categories of real estate, including, but also extending well beyond, foreclosure properties. Auctions have become more popular, in part, because property owners recognize that taxes, maintenance, financing, and other costs can significantly erode their equity, especially if the property sits idle for many months. Auction sellers can effectively pick their sale date. And they may be sending a strong signal that they’re motivated to sell, depending on the type of auction method chosen.
As a home buyer, you can feel good about participating in auctions because you are largely in the driver’s seat, in terms of determining what price you will pay. The seller may set a minimum price, and you will still have to compete with other buyers, but the actual selling price is ultimately set by you, the buyer. This is in sharp contrast to houses listed for sale through brokerage firms, where the seller sets the price, and the rest of the purchase process is about negotiating a sale.
Even though auctions are managed differently than traditional brokerage sales, it’s still a good idea to engage the help of a qualified Accredited Buyer’s Representative. Your agent can assist you by providing a competitive market analysis and other information that will be helpful in developing your pricing strategy. He or she can also help you review the disclosure package, accompany you to any presale inspections, explain the sales terms and auction procedures, coordinate attorney reviews, assist in prearranging financing, and act as your representative in managing transaction paperwork with the auction company.