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How To Buy A New Home At An Auction | Financial Planning Tips

How To Buy A New Home At An Auction

Anyone who does not know the tricks of the trade at any type of auction whether it’s a concert and you’re trying to get tickets at affordable prices¬†online, or real estate auctions – one can get hurt financially. Many agents at these auctions just want a sale and may have no regard for others. They do not care who gets hurt.

Avoid auctions completely unless you are experienced at buying properties. You could suffer financial loss on inspections if you find out later that the house is not in your price range.

If you are wondering how to buy a new home at an auction, following are a few rules to help protect yourself.

1. Do not take anything for granted. Check out everything you are told. A few agents may tell you the truth, but many will lie to you, too, so be diligent in checking all the facts.

2. Understand that agents quote the selling price as less than it really is, by about 20%. If you feel you are not getting the true answer from an agent, ask the seller for the actual price.

3. Be careful about trusting agents. Do not give them important information. Ask questions, but be vague with your answers to theirs. Use expressions such as that you are not sure, or might be interested.

4. Determine the true value of a property in which you are interested. Do a bit of research by finding details of similar homes that have sold in the area. You can also contact a real estate appraiser for an unbiased opinion.

5. Never buy a home at auction without legal advice. You may save hundreds of dollars but risk losing thousands by acting on your own. Have your lawyer talk with the agent on your behalf, or even accompany you to the auction.

6. Do not offer any bids until the reserve is met. There is no sale until it reaches reserve, so do not bid until then.

7. Never reveal to anyone the highest price you plan to bid. Once the reserve is met—the lowest price the seller will take—it will then go to the highest bidder. If the bidding stops under your highest bid, you will be able to win the auction.

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