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How Do Home Auctions Work?

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By : John Cutts    99 or more times read
Home auctions may seem daunting at first, but in many ways they actually make buying a property more straightforward. If you're considering buying property at a home auction, it's important to know that you will have to do some work beforehand.

The first step is to secure financing. Go to a bank or other lender and apply for a mortgage loan in the same way you would for a house on the open market. Once you know how much you have to spend, you can begin to set parameters for your bidding.

When you buy home auctions for sale, you're trying to take advantage of chances for savings. Most properties sold at foreclosure auctions go for up to 50% off their actual value, and that's what makes this process so attractive to buyers. So it's important to get all the information you can about a property before an auction so you can assess its true value. Get an appraiser to estimate the market value of the home, and use this as your guide. If you're trying to save 20% on the property, don't let your maximum bid at auction go above 80% of the appraisal value of the home!

For those wondering how do home auctions work, the process is generally straightforward. The auction will be open to the public, and held either at the property itself or a local courthouse. Once bidding opens, anyone can bid. Once a winning bidder is established, they usually have to present a down payment on their bid amount. They then have a certain amount of time (depending on local law) to provide the rest of the payment. And then the house is theirs!

It's always best to check out the individual foreclosure laws in your state before buying, just to make sure you've got all the rules and procedures clear. Home auctions can be a great way to save, try checking out some home auction property listings today!
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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