The transactions of real estate at auctions have become more popular than the traditional mode of transactions through real estate brokers or agents. The traditional mode gives personalized service and a personal touch to the transactions. But the auctions, although somewhat impersonal, are more efficient, fair and less time consuming. Therefore, the transactions through auction sales are best suited to today’s busy person. The auctions cover a wider range of properties over a wider area involving a large number of participants.
Online real estate auctions have become the most recent trend. This trend is becoming increasingly popular and has come to stay permanently with us. That’s why we will shortly delve a little deeper into the subject of online auctions.
Jeff Adams is one of the popular online advisors on real estate investment. According to him exploring online real estate auctions for prized property investments has the potential of striking real nuggets in all that mud and the dirt, just like the western pioneers of the bygone era used to brave the hazardous frontiers for the glittering gold.
The Types of Real Estate Auctions
Like all modern professions, the auctions too have their areas of specialization, each agency concentrating on a particular type of property. This facilitates the auction houses an easier reach to their niche clients while meeting the rigors of service specific to each type of property.
- Sotheby’s Realty & LandsofAmerica.com are two leading auction houses that deal with vast agricultural properties like farmlands, ranches etc
- Williams & Williams cater mainly to commercial real estate properties.
- Treasury Dept. Website offers on auction sale the properties seized by the U.S Government for tax defaults and violations of the federal law.
- Platinum Real Estate is a premium auction house that concentrates on ultra luxury and unique properties costing millions of dollars.
- Finally, we have Auction.com & RealtyBid.com which are two leading online auction websites in America offering thousands of housing properties, including foreclosed homes and REOs, in their lists of auction sales.
The Online Auction Process
Online auctions are simple and uncomplicated. You can get complete information on the procedures and about the properties being auctioned, usually with their pictures from strategic angles, from the concerned websites. Here are the steps to follow:
- First you have to create an account with an online auctions website. You may also be required to fax to the website’s office the signed copies of certain verification documents. After this, search the list of properties on offer. You can also set alerts for new properties being offered.
- Next, you have to register as a participant for the specific property being auctioned. You may be required to deposit specified earnest money along with other charges, if any, through online credit transfer. The earnest money will be refunded if you fail to win that particular bid. Live online bidding starts exactly at the appointed hour.
- If you win the bid you will have to pay up the bid amount and complete the necessary paperwork at the website’s main office or at any branch office nearest to you. All the formalities, from the start of the auction till the close of the deal and transfer of the property in your name, will be accomplished within a few of weeks.
Normally you may not be given access to inspect before-hand the property being auctioned. In such cases you may drive by to ascertain the overall condition of the property from outside. Some online auction houses, however, conduct “open houses” where you can walk through the selected property sites for first-hand inspection prior to the start of the bidding process.
Some Tips for Buyers
There is no point in getting intimidated by online auctions. Once you get used to them and pick up a few tricks of the trade, the process is fairly simple and transparent. In spite of occasional junks, some of the best properties turn up at online auction sites.
- You get to see the result of the auction immediately. The unconditional contract deeds for the property transfer are signed promptly.
- During the bidding process you can watch the competitive bids and look for the signs of rival bidders reaching their limit.
- The price benchmark is displayed on the screen, so you get an idea of the probable market valuation of the property.
- Pre-auction offline sales sometimes occur. In such cases you may have to offer a lot more money than the other bidders.
- Conduct prior inspection of the site and get all the relevant information on the property. Also, ascertain your budget limitations before getting into the bidding race.
- Make sure that the financing for your purchase is in place and ready at hand in order to conclude the winning bid without a hitch.
- Before getting into the real game, gain some experience as an observer or as a dummy participant. Study the strategies applied by seasoned players.
- Stick to your “walk-away” price. Although you may feel a little disappointed to miss the prized property, it is better than regretting later for having paid too much for that piece of property.
