Buy a house at auction
If you are looking to buy a house at auction, there are a few important things that you have to be aware of before you start putting lots of money into an asset that isn’t too easy to get rid of, and could end up costing you more than you get out of it.
Before you try your hand at real estate through auctions, you should think about why exactly you are purchasing this house.
There are three main reasons to buy a house, either to live in it for yourself, to fix it up and then resell it, or to rent it out and become a landlord.
If you are going to buy a house at auction for you to live in, it is extremely important that you have it checked out thoroughly by a trained home inspector so that you don’t get any unpleasant surprises once you have lived in the house for a few weeks. This should include a full termite inspection, radon inspection, and a roof inspection.
Often, the companies that run these places where you can buy a house at auction, will have these inspection reports made available to everyone who inquires about them, to show that they are selling what they say they are selling, since getting a bad name in the real estate business can mean less people come to you to sell their house or to buy a house for them.
Since you probably won’t be able to go with the inspector when they take a look at the house, be sure to ask the auctioneer questions about potential problems that you see on the reports. If you come across a house that doesn’t have inspection reports, you should take that as a sign, why wouldn’t they want you to see what an inspection report has to say?
If you are looking to buy a house at auction in order to resell it, then the inspection may not quite mean as much, since you are going to go in and fix a lot of the stuff yourself anyway. The things to look for with this kind of real estate are things that can be, or are, unique to the house, including the kind of neighborhood it is in, if it has a large yard, lots of trees, etc. You’ll always have to go into the house and replace trim and baseboards, as well giving everything a new coat of paint, but you won’t be able to replicate things like mature trees or lot size. This is where the profit in these kinds of sales comes from, giving people something unique or special for their area.
Some people try to buy a house at auction specifically to rent it out, these require the least work of all, since basically all you will have to do is make sure that the place is presentable and livable, it doesn’t really need to appeal that much, since renters are usually just looking for a place to live, they may not be able to pay a premium for some of the fancier things that some houses may have.