I don’t usually put links to other articles because sometimes the links change and the article cannot be found anymore. But I just read an article from the Daily Herald that actually taught me something. It’s not real detailed but even being a REALTOR for 24 years, I have never attended a house auction.

I’ve put bids in for HUD homes for sale and even won one, although the buyer backed off after all that work! With that kind of bidding you don’t know how many others are bidding or what their bids are. With a home auction it is happening in real time and you’ll be in on the action.

Some sellers have a reserve and will not be forced to sell if that reserve is not met. And if the property does not have a reserve then high bid wins. I’ve actually been involved in antique auctions as I had a friend who was an auctioneer. In fact, many years ago I was involved with automobile auctions. Many people have in mind a very frenzied auction where you have to act fast to win. A home auction is at a good pace and a bidder will not feel pressured.

You have to do your homework and the first step is viewing the property prior to the auction. If you’re going to have a REALTOR assist you then the agent needs to be with you when viewing the property. You also need to be pre-approved (I would suggest a full pre-approval versus just a pre-qualification - I’ll have to write another post on the difference between the two). You’ll also need to know what your highest bid will be and you should base that on what other similar properties are selling for in the area.

You’ll need to have a cashier’s check with you for the down payment, which might not be refundable if you win the bid and then back out. If you have something else to sell you might also need some kind of interim or bridge financing. The first person to talk to should be your loan officer.

You can read the entire article here.