The standard operating practice is to price the properties very low and then to work the buyers in to bidding up the property. Many sell very close to market price. Also, you need to know the condition of the property and the terms of the auction. Buyers often need to pay a 1% auction fee - which could negate your savings.
Your interests are better served by finding a Realtor who can help you set up a buying plan and then alert you when the best properties become available.
I try to position my clients to avoid any bidding wars which serve the seller more than the buyer.
Check the reviews of your chosen real estate professional and see what their clients are saying about their experiences.
I have been a licensed buyer's agent for 21 years and if you have not yet aligned yourself with a realtor to represent you, I would be happy to speak with you.
My guess is this is why you are interested in REOs or Auction properties, the perception being that you will find a "good deal". You will, but more on that in a minute. First I think it is important to define what it is you actually hope to accomplish. Are you looking for a home for your family? Are you looking for an investment? Do you want an investment that requires more management or less management? Are you comfortable spending money on rehab expenses? Maybe you have already asked yourself these questions and if so, then well done, if not this is really where you should start. Why? Because we don't have a shortage of distressed properties for sale, almost 50% of the market (in San Diego and Miami) is distressed real estate. This means once you identify the niche you want to occupy finding the right home is really pretty easy.
Most agency websites offer a free searches of REO properties for sale. I have them on our website, as I am sure many other brokerages do also. As for auction properties there are two types of auctions, the auction that takes place on the county courthouse steps or the auction that takes place in the ball room. There are a couple websites that offer lists of properties for sale at the county courthouse steps however there are some key items you need to understand.
1. The courthouse sales are all cash sales.
2. You are buying the home without inspections and run high risks
3. If the property is occupied you will have to evict.
4. There may be problems with the title that you are not aware of, there is no title insurance in an auction sale.
I would take a look at http://www.foreclosureradar.com or http://www.foreclosure.com or http://www.realtytrac.com for info on properties about to go to auction.
As for the other type of auction there are 3 or four major auction companies. Williams and Williams, REDC aka Auction.com, and Hudson and Marshall. Be cautious about these sales because i have seen many people get caught up in the hype and overpay for a home.
So first things first.
1. Identify exactly what you are looking for. (if you don't know this yet, speak to others, go to investment club meetings, talk to a real estate agent, etc.)
2. Target your search to great deals in your focus zone. (location, price range, condition, type, etc)
3. Be quick to execute. (Great deals last maybe 24 hrs, if you aren't prepared to jump fast you will be left out)_
I wish you best success.
If you intend to do this for a living, you may want to pop for a membership to RealtyTrac (realtytrac.com). It costs a few hundred bucks per year, but it has a good property alert system and also provides information on pre-foreclosure (NOD) properties.
Please feel free to log onto our very user friendly websites and by all means call me on my cell anytime or email me. 760 815-6977. email@example.com.
Byron Lohman, ABR, CCIM, SFR, CDPE
Prudential CA Realty