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10 Tips to Know Before Buying a House at Auction
10 Tips to Know Before Buying a House at Auction

Not sure what you need to know before buying a house at auction? Know the types of auctions, how to search, preparing to bid, and more.

Zoe Z Littlejohn avatar
Written by Zoe Z Littlejohn
Updated over a week ago

If you are in the market for a new home, you may wonder what avenue to take to find an affordable property. When interest rates are high and home prices are skyrocketing, one of the most cost-effective options for purchasing a home is buying a house at auction. When buying a foreclosed home from an auction house, you can often find properties at below-market value. This is a great way to purchase real estate at an affordable price, whether for personal or investment purposes. To help you get started, we’ve created this guide on what to know before buying a house at auction. Take a look below for ten tips on buying a house at auction.

  1. Know the Types of Auctions

Before buying a house at auction, knowing the different types of auctions is essential. Understanding the different types of auctions can help you create a bidding strategy that works for you and your goals. The two types of auctions include:

  • Absolute Auction: An absolute auction is when the sale of a property is given to the highest bidder. There is no reserve price with an absolute auction, meaning if only one person were to show up at the auction house, their bid could be accepted no matter how low.

  • Reserve Auction: When participating in a reserve auction, the seller will have a minimum price they would be willing to accept as a winning bid.

  • Minimum Bid Auction: In a minimum bid auction, bidders will have a minimum acceptable amount when placing a bid on a property.

  • Total Debt Auction: In a total debt auction, bidders will place bids on properties that cover the total debt owed by the borrower.

These are some of the main types of auctions you can find when looking to buy a home at auction. Auctions can take place in-person at an auction house, courthouse, or online through an online auction house such as ServiceLink Auction.

2. Research the property before the auction

After choosing an auction type that best suits your preferences, the next step is researching the property before the auction. In almost all cases, you are not allowed to step foot on the property of foreclosed homes being sold at auction. If you win the property, you will purchase the house “as is,” regardless of any damages, liens, taxes, or titles on the property. However, interior access may be available with newly foreclosed and bank-owned properties newly foreclosed, and bank-owned properties and interior access may be available. At ServiceLink Auction, you can view interior access information on the Property Details Page (PDP) on our website.

With that said, research is crucial when it comes to buying an auction property. After choosing an auction, look at the properties they’re listing and conduct an online search on popular real estate platforms like Zillow, Redfin, and Opendoor. Here, you can find some basic information, such as the year the home was built, the number of bedrooms and bathrooms, the square footage, and when the home was last sold. Additionally, interested buyers should pull a title report through a title company to ensure the most accurate information.

3. Research comparable properties before going to an auction

In addition to researching the property or properties you might be interested in, make sure you research comparable properties before going to an auction. This is an important step, as it ensures you’re purchasing a property at a fair market value should you win the bid.

At ServiceLink Auction, you can conduct a Market Analysis on each property on our site. To do this, go to the Property Details Page to find pertinent information.

4. Do a title search through a real estate attorney

By working with a real estate attorney, you can conduct a title search to uncover useful information, such as any titles or liens on the home. This is important because if you win a home at auction, you may be responsible for any taxes, liens, or titles on the property.

5. Get pre-approved and financing in place

You must provide proof of funds at most auctions to show you have the capital to purchase a foreclosed home if you win a bid. Before heading into an auction, ensure you have enough capital to purchase the property. Foreclosure auction properties are cash only, meaning you’ll need to pay for the property in full should you win the bid. However, online auction properties, such as newly foreclosed or bank-owned properties, may consider financing. To determine whether you can finance a property on ServiceLink Auction, visit the Property Details Page of the property to see if financing is considered.

6. Consider remote bidding for added convenience

Previously, homes were sold at auction at courthouses, conference halls in hotels, community centers, or schoolhouses. Today, you can skip crowded, noisy rooms that can be intimidating and bid from the comfort of your home. ServiceLink Auction is an online auction house that makes it easy to bid on homes anywhere you have an internet connection. With this added convenience, you can easily look at your notes and market research without the intimidation of other bidders.

7. Research the auction and provided resources thoroughly beforehand

Not only should you research the properties up for auction, but you should also research the auction house you plan to bid at. Each auction house will have its own set of rules and qualifications to follow, so please take the time to look into the criteria and regulations you need to meet to bid on a home at auction. You can learn more about ServiceLink Auction and the resources we offer in our Learning Center.

8. Confirm all details the day before the auction

As you get closer to the day you’re about to buy at an auction house, make sure to double-check and confirm all details, including:

  • Location of the auction

  • Website of the auction house and log-in access (for online auctions only)

  • Auction registration

  • Hours of the auction

  • Bidding rules

  • Eligibility requirements

  • Property details

  • Financing

9. Have a strategy for buying a house at an auction

Another tip on what to know before buying a house at auction is to have a bidding strategy in place. Knowing how to bid is crucial, as there are rules and best practices to help you win the bid. For example, if you’re buying a foreclosed home at an auction house, you may want to think about where you will stand or how you will dress. When buying a home at auction online, you should have a strategy to outbid your competitors while ensuring you do not go over your threshold and bid on (or even win) a property that’s out of your price range.

10. Visit ServiceLink Auction

Interested in buying homes at auction? Look no further than ServiceLink Auction. At ServiceLink Auction, you can find foreclosures, bank-owned, newly foreclosed, and short-sale auction homes to bid on. We make it easy to review property details and bid online so that you can find investment properties or your forever home at a great price.

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