With an increase in virtual showings, more and more people interested in investment properties or new homes are turning to online property auctions. Property auctions online make it easy to find real estate in any given area from the comfort of your home. Without the need to bid on properties in-person at auction houses or community centers, you can spend more time looking for the perfect investment property or forever home. In this guide, we’ll walk you through the different types of online property auctions, the benefits of buying real estate through an online auction, and more.
What Is an Online Real Estate Auction?
An online real estate auction is similar to a traditional auction, with the primary difference being its location. A traditional real estate auction takes place in person, typically at an auction house, courthouse, hotel hall, or a similar venue. On the other hand, online property auctions take place on the web, where interested bidders can create and log into an account on an online auction house such as ServiceLink Auction. Once their account is created, they can register for online property auctions and participate on auction day.
However, there are numerous types of auctions to be aware of, as each type may require a different bidding strategy. Below, you’ll find the different types of online property auctions with tips to navigate each process.
Bank-Owned Auctions
When foreclosure homes fail to sell at auction, they can end up at a bank-owned auction. Also known as a real estate owned (REO) property auction, these auctions occur when owners default on a loan and the bank repossesses the home. Typically, these homes are sold in an “as is” condition, meaning no repairs will be made on the property before the sale.
Newly Foreclosed Auctions
Newly foreclosed auctions sell homes that were recently foreclosed. An example of a property that ends up at a newly foreclosed auction includes those part of the Claims Without Conveyance of Title (CWCOT) program established by the Federal Housing Authority. The CWCOT program was created to help lower the inventory of foreclosed homes by the U.S. Department of Housing and Urban Development (HUD) and allows for properties to be sold through traditional foreclosure auctions or through online auction marketplaces.
Short Sale Auctions
Another online property auction type is a short sale auction. Short sales in real estate occur when a homeowner sells their property at a price that’s below the amount owed on the property. Homeowners in this financial situation may turn to a short sale to avoid their bank or lending institution from seizing their property in foreclosure.
Benefits of Buying Real Estate Through an Online Auction
Now that you know the different property auctions online, you may be wondering if they’re right for you. There are several benefits of buying real estate through an online auction. Some of these benefits include:
Reduced price: In some cases, you may be able to purchase homes at online property auctions at a price lower than market value. This is because newly foreclosed homes, bank-owned homes, and short sale homes may be due to lenders eager to sell the property quickly or based on property condition.
Easy-to-use platforms: Many online home auctions, such as ServiceLink Auction, have easy-to-use platforms that make buying homes at auction simple. Because these auctions take place over the web, investors and aspiring homeowners can browse properties from the comfort of their homes.
Ability to compare: When at a traditional auction house, you might not have the ability to look at multiple properties at once. Through online real estate auctions, you can easily compare different properties on your computer or smart device and look at features such as location, square footage, year built, and more to make a wise investment choice.
Reduced stress: In some cases, attending in-person real estate auctions can be stressful due to the high intensity of being in a room of bidders vying for a property. When participating in an online real estate auction, you can focus on the properties you’re interested in without getting distracted or influenced by bidders around you.
Increased opportunities: Participating in online property auctions gives you access to more opportunities. Whereas traditional auction houses may present a handful of properties, online property auction houses have the ability to showcase more properties with search filters to help you find properties that match your needs.
Rise in Online Auctions After the Pandemic
Like many industries, the Coronavirus pandemic impacted the real estate market. The COVID-19 pandemic forced people across the globe to shelter in place to reduce the spread of the virus. In the real estate market, people could not tour homes or visit auction houses. However, online property auctions allowed investors and eager homebuyers to browse and buy properties online. Even with the rollout of vaccines and stay-at-home orders lifted, many have found the accessibility of online real estate auctions preferable.
ServiceLink Auction Online Auction Opportunities
If you’re interested in buying properties at auction, look no further than ServiceLink Auction. Our online property auction site has a wide range of properties to bid on, including foreclosure homes, newly foreclosed homes, bank-owned homes, and short-sale properties.