Home auctions are an ideal way to find below market values on houses. While many of these auctions have now moved online, there’s still live public home auctions if you know where to look. Both live and online events have their pros and cons. Below I will share my experience with the home auctions near me. I’ll also discuss where to find them in your area, how they work, tips for a winning strategy, finding undervalued properties to bid on, and FAQ’s.
Map of Home Auctions Near Me
For “Home Auctions Near Me”, see below for locations…
What is a Home Auction?
A home auction is a specialized auction in which houses are sold via a bidding system. It presents an opportunity for buyers of homes, land, and real estate to get in at potentially lower price points. Similar to other auctions when you bid you are agreeing to a legally binding contract to pay for the final price should you win. Most home auctions are a traditional English auction with a reserve, but there are other styles of auctions on houses as well.
For infomation on manufactured home auctions, read this.
How Do the Home Auctions Near Me Work?
Housing auctions typically are structed like this:
- There is a preview period where you can view the homes in a catalog.
- There is an inspection period where you can visit and view the homes available at the event for that day.
- A registration period, where all interested bidders register to be a participant in the event. Here you must prove who you are and that you have the funds to bid on the properties. At some events you can get financing to cover the costs.
- When the auction begins an auctioneer from a professional auction company facilitates the event. They are auctioning houses that the auctioneers company has agreed to auction in exchange for a percentage of the final hammer price.
- When the event kicks, the auctioneer will begin with a starting price (which could be below the reserve price to get people actively bidding). When a registered bidder places a valid bid, the auctioneer raises the ask in small increments to see if any one else will compete with the offer.
- These increments are often relative to the expected price of the home. This means they can be in hundred or thousand increments.
- The registered bidder with the highest bid wins as long as the owners reserve price is met.
This is how the home auctions near me work.
Benefits of a Home Auction
If you are thinking about either buying or selling a house at an auction instead of via a real estate agent, consider the following benefits…
Buying
- Typically everything is priced fairly based on the homes market value.
- The actual sales process is much faster then buying with an agent.
- You do not have to negotiate with an owner, just against other bidders.
- The house will have all it’s details reviled beforehand so you can be informed.
- You can get a deal below market value.
- No agent fees.
If you’re looking to purchase a houses and wondering other ways it’s done, buying a home via an auction is a popular choice.
For selling a home via auction, there are also benefits…
Selling
- The sale is immediate and you can dump a piece of property fast. That means you know exactly what date you can stop paying a lien or taxes on it.
- The pricing can get driven over market value if the bidding gets aggressive.
- The sale is transparent and you will know exactly what the auctioneers take is before hand.
- If you choose the right auction company who markets to high end buyers, who can get high end bidders.
I think selling a house at auction is great if you need to sell quickly or you think there is additional value in your home that local comps may not account for.
Finding Home Auctions Near Me
There is a variety of ways to find home auctions near me. The most traditional ways are still via newspapers, classified ads, and online. You can also learn about them via forums and word of mouth.
There are also special home auctions by the government. You can learn about these on sites like USA.gov or at your local Chamber of Commerce.
How I Find Home Auctions Near Me
I like to use Google Events. Here you can find specialized auction events that may not be widely publicized. That potentially means homes with the less people showing up to bid. Typically these are held by smaller auction houses. You may not find the top homes to bid on, but there are often hidden treasures at these. Click here for Google Events – Home Auctions.
Whos Homes are These Anyway?
Home auctions feature houses that a owner wants to sell. They have decided not to use a real estate agent. That decision is often based on if they think it’s more convenient, need to sell a property by a certain date, or the right buyer may pay more for it.
There are other reasons homes go to auction as well. This can occur on a repossession by a bank when a lien goes unpaid. A repossessed house can certainly be a concern for some potential buyers. The good news is that all of this type of information must be disclosed to all potential buyers. So with that being said, before you bid on any home, piece of property, or real estate, you should look as to why it is being auctioned.
Are Home Auctions Priced Fairly?
Most homes at an auction are priced according to fair market value. You may see an event start though with the initial starting bid below market value. This is a technique used by auctioneers when they think there will be multiple interested parties. This is how they get the action going and people competing against one another to drive up the price.
When you purchase a home at an auction event, you skip the negotiation process with the owner. You only have to be willing to pay slightly more then someone else.
Are There Fees to Buying or Selling at a Home Auction?
Yes. Auction companies make money by taking a percentage of the final sale price, (called the final hammer price). There are auctions that charge a fee to both the buyer and the seller. It’s important to read the rules and fees for every event you attend. There can also be other fees like reservation fees and additional premiums depending on the service that you’ve chosen.
Do You Just Show Up and Bid?
To bid on a house, you must be registered for the event. Common criteria to register are a photo ID, proof of residence, and proof of your finances. Since homes are expensive and when you bid are creating a legally binding agreement to pay, the auction company needs to vet that you are a serious participant. Anyone who is approved to register can bid and is pre-approved by the auction company to participate.
The rules can vary from company to company and event to event. You should always read the rules before hand and check the auction companies website. I also like to read reviews on the auction companies to check for any funny business other consumers have complained about.
Winning Tips for a Home Buying Auction
- Dress the Part: Impressions matter and you can intimidate other bidders.
- Sit Towards Front: Make sure the auctioneer can see you and act like you have been there before.
- Don’t Tell Everyone Your Business – Be secretive about how much you can actually afford.
- Ask to Lower the Reserve: If the reserve hasn’t been met, you can ask the auctioneer to lower it. It could give you the winning bid, but conversely could invite other people to bid as well.
- Determine Your Strategy – Bid aggressive early? Bid aggressive late? You need to read the room and feel how the event is flowing.
- When you bid don’t say 500, say 500,000. Adding the thousand will make you sound more intimidating.
- Ask About the Clearance Rate – This is percentage that shows how many properties an auction has sold during the previous time period. You want to find a rate below 60%. That means low interest from buyers, which equals lower land prices
- Hire a Buyers Agent – This is a sure way to win by getting someone with experience and no emotional attachment to handle the bidding for you.
Home Auctions Near Me Conclusion
Home auctions certainly can be beneficial for both a buyer and a seller. For a seller looking to move a property quickly and by a certain date is a big one. For a buyer, the potential to get homes below market value is the key driver. Auction companies with low clearance rates are your best bet if you are a buyer. This is what I have learned from the home auctions near me.