Are auction houses cheaper?

You can only get the highest price if all the buyers who may be interested in a home are given the chance to buy the home. As auctions repel so many buyers, the highest paying buyers often avoid auctions. And this is how auctions get lower prices.

Do houses sell for more at auction?

Most buyers at auction buy for less than their limit, which means most sellers at auction under-sell their homes. You can’t possibly get the highest price for your home if the central focus is on the Seller’s Lowest Price. You can only get the highest price if the focus is on the Buyer’s Highest Price.

How much more do houses sell for at auction?

While it varies from auction house to auction house, as a rule of thumb try adding an extra 10\% on to guide prices for a more realistic selling price.

Is it better to buy before auction?

Strong pre-auction offers can be very appealing to vendors, especially those who find auctions and opens stressful. Selling early might also allow them to compete for a home already on the market. Selling before buying gives them budget certainty and a great price might allow them to buy better.

Are house auctions a good idea?

The benefits of buying at auction include expanding your options and possibly purchasing at a discount. You may face less competition to buy an auction house compared with buying in the traditional way, but you will also be dealing with a different pool of potential buyers—often, experienced investors.

What are the risks of buying a property at auction?

Perhaps the biggest risk of buying at auction is that you will have limited knowledge of the properties for sale, making an expensive misstep a real possibility. Also, as with any real estate purchase, you will need to read, understand, and sign lots of paperwork (ideally with the help of a real estate attorney).

Can you negotiate a pre-auction offer?

If you end up going through to the Auction, watch out for a situation where the Auctioneer is the only one bidding against you. This happens all the time. If they take you into a private room to ‘negotiate’ and offer to tell you the reserve, just be aware that they will likely give you an inflated number.

Can I withdraw a pre-auction offer?

Withdrawing a pre-auction offer will depend on the terms and conditions of the auction. Once the auction starts, the buyer will be able to withdraw their offer and are able to do so at any point until the end of the auction. You should make this clear to any interested buyers who want to make pre-auction offers.

Is it worth it to buy a house at auction?

And even then, it’s risky. But if you can pull off buying a house at auction, you can get into a home for as much as 50\% off list price. Foreclosures still abound in the U.S. real estate market, although some areas (think Florida and Las Vegas) have way more than others.

How can I get excited about a property auction?

If you can’t make it in person, you can watch auctions online via EI Group (thanks to Maas on the forum for this tip). Add 10\%+ to the guide price. It’s easy to get excited about a property when the advertised price is so low – but that’s exactly what the auction house wants.

How much should I add to the price of a property?

Add 10\%+ to the guide price. It’s easy to get excited about a property when the advertised price is so low – but that’s exactly what the auction house wants. Remember the listed price is a guide price only and it’s likely it will go for more.

Do auctions allow home inspections before buying?

Auction properties often do not allow a home inspection or any legal way to view the interior in person. If you can’t afford the risk of buying a property in poor condition, stick with auctions that allow you to inspect the property before bidding.