Home Buying in Seattle>Question Details

Joan, Home Buyer in Tenino, WA

Is Auction a good way to buy homes in Seattle area if I’m looking for a good deal? Any particular factors I should watch for? Thanks.

Asked by Joan, Tenino, WA Wed Apr 10, 2013

Help the community by answering this question:

Answers

5
There are many factors to look out for. As you do your research in this area over the next few months, you will to educate yourself and become very aware of the factors to watch for. You then will be fairly comfortable in going this route to purchase a property when the time comes.
Hope this helps.
0 votes Thank Flag Link Thu Apr 11, 2013
Joan,
If you are an experienced buyer, with plenty of cash and or a line of credit you can tap and you know how to do the right research, maybe. Plenty of pros go to the auctions and either don't buy because the deals just aren't there or don't make the great money they hoped to.
Auctions are not for the casual or part timer. There are services that will "coach" you, arrange financing with hard money lenders and "advise" you as to the values of the homes. In my experience their advice isn't reliable.
If you want to become an investor, get with someone knowledgeable and experienced to learn from. You will still make some mistakes, but you will also have some successes. Nothing is as easy as it seems.
0 votes Thank Flag Link Wed Apr 10, 2013
Lots of info below, but all is correct. It really depends on how astute an investor you are and the capital backing you might have. Auctions are an entirely different animal and work way outside the traditional real estate practices.

Having said that, it doesn't mean you can't get a good deal. But it is a very large risk.
0 votes Thank Flag Link Wed Apr 10, 2013
Hi Joan,

This is a good question, but the answer will not be short. I can tell you from my experience. I have just been through this with my clients yesterday. This topic will take a 90-minute session to barely help you start investing in Auctions.

A short answer is NO! unless you are a wealthy investor who has millions in cash to spend and a lot of time to kill.

Few factors an investor should watch out for:

(1) Cash or Cashier's Check

These are the only two payments in auction. If you need a mortgage to buy a property, don't think about Auction!!

(2) Property Details and Condition

The information of properties on Auction requires Bidders' verification. Auction properties are sold "AS IS, WHERE IS, WITH ALL FAULTS AND LIMITATIONS" and all sales are "FINAL". If you don't know the property details before you go into the auction, chances are you will not be able to verify it in Auction.

(3) Minimum Bid and Auction Location

Auction Location is readily available, but you need to know someone in title company to get it for low cost. Often the minimum bid is not revealed till the day before auction. Auction is on Friday, and the minimum bid may not be available till Thursday afternoon.

(4) What really do you Bid for?

Bidders are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on a property. Placing the highest bid at an auction does not automatically entitle you to free and clear ownership of property. You should be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the property.

(5) Last Minute Cancel or Postponement

Many foreclosing properties are under short sale negotiation now. If the listing agent has an offer, chances are the foreclosure auction is postponed or removed the day before, that is, Thursday before the auction day. Thus, even if you have find out all about the property and know you are buying the right one at the best price, it may not be available to you eventually.

(6) Title

Last but not lease, you do not obtain a warranty deed through an auction. You will not have the seller purchase you a "title insurance" and help you deal with any title issues when the property is in your name. If there is no immediate lien concerning you like I talked about in item 4, you may be concerned when anything happened during your ownership.

Good luck for your real estate investment and let me know if this is making any sense. I would be happy to walk through this in more detail. Give me a call @ (206) 604-2755

To view houses for sale and set up your instant listing alert, go to
0 votes Thank Flag Link Wed Apr 10, 2013
In some cases, people get caught up in the auction bidding frenzy and pay more than a property is worth. With auctions, you often have no opportunity to inspect the home in advance. You may be buying a home which needs many thousands of dollars in repairs.

Likewise, buying a home that is going into the foreclosure process has pitfalls. Every bank behaves differently, and many lenders drag out the selling process for months and months. More than 2/3rd's of short-sale and pre-foreclosure sales never close.

Your best bet is to buy a home that has already been through the foreclosure process and is available on the market ---listed by a broker. There are some great deals to be found, and you don't have all the drama and headaches associated with a home that is in the middle of the foreclosure process.

Find yourself an experienced agent , that's the place to start. An experienced agent can help you avoid making a big investment mistake.
0 votes Thank Flag Link Wed Apr 10, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer