Acquiring a property through home foreclosures auctions can be rewarding indeed. Low prices, quick procedure and security from other competitors are just some of the benefits that these auctions offer. However, auctions also have some negatives and these are the things that home buyers who are new at auction bidding should watch out for.
The Good Part
A house acquired from an auction assures the winning bidder that he is the legitimate owner of the property. Unlike buying from a bank or directly from the homeowner, the law does not allow other bids to be entertained once the gavel has been put down and a winner has been declared. Even if the offer that comes after the bidding is better than the winning one, sellers are not allowed to entertain them and they are legally bound to follow this rule.
Acquiring a house from home foreclosures auctions also offers a quick process that could be finished by the end of the auction day. Winning bidders are usually given 90 days to close the deal, but paperwork and details should already have been worked out by the end of the bidding day so all the buyer needs to do is provide the complete purchase price within that 90-day grace period.
What Buyers Should Watch Out For
One worry that buyers should concern themselves with is the amount of money that they need to take with them when participating at an auction. Most auctions require the winning bidder to shell out 10% of the full price right after being declared the winner. In addition, auction house fees, closing costs and other expenses are also required right after the bidding war. The money should be in cash or in cashier's checks and no excuses will be accepted for such cases.
In some states of the U.S., the requirement is not just 10%. Some auctions call for bidders to have the full amount of their highest bid with them before they are allowed to even participate in the bidding contest.
Buyers who prefer home foreclosures auctions can get a lot of good bargains from these events, but they should have enough financial resources since having the money on hand during the bidding is a must for this type of foreclosure buying.