If you’re interested in buying land, participating in a real estate auction might be right for you. Real estate auctions can be a great way to find plots of land below market value, allowing you to grow your portfolio or find land to build a home on. However, it’s essential to know how to buy land at auction, as it can be possible to purchase land above market value. In this guide, we’ll go over how to buy land at auction so that you can make an educated rather than emotional investment decision.
Pre-Auction Preparation and Due Diligence
So, how do land auctions work? At a land auction, a starting price will be set for people to start bidding, and the highest bidder will win the property at auction. With that said, partaking in a real estate auction can be an intense experience where emotions run high, making it easy to make the wrong decision. To help prevent this, you'll need to do your due diligence during the pre-auction stage.
Before the auction begins, it’s important to take your time to research properties that are being auctioned off. The research you conduct depends on your real estate goals. For example, you may be interested in purchasing land for investment purposes or looking for land to build a home on. Your goals will determine what you’re looking for in a piece of land, such as acreage and location.
In addition to outlining your goals, preparing for the auction is important. Take time to review the terms and conditions of the auction that outline the rules that come with purchasing land. It’s also recommended to make a list of comparable plots of land up for auction to compare factors like price and location.
Contact an Attorney or Real Estate Agent
If you’re wondering how to buy land at auction, working with an attorney or real estate agent can be helpful. Attorneys and real estate agents are experts in local markets, and they can help you better understand a plot of land and whether it’s worth investing in. For example, real estate agents can help you value the property you’re interested in to help avoid overbidding.
Study the Property Details
If you’re interested in how to find land auctions, you can start by looking at public institutions, such as your county treasurer’s office. You can also find land for sale at online auction sites like ServiceLink Auction. When you find an auction with land for sale, the next step is to study the property details. Factors to research include:
Location
Zoning requirements
Natural disasters
Utility sources
Lot size
Drinking water
Sewage
Road access
Local bylaws
Property taxes
These are just a few property details you should consider before participating in a land auction. Working with a real estate agent can help you find more information about a potential property.
Schedule a Tour of the Land (If Available)
If you’re looking to purchase land at auction, it’s important to know that, in most cases, a showing may not be available. Foreclosures are sold sight-unseen, and buyers may not trespass. However, you can use online maps to study a property or drive by a property and view it from the public road. In some cases, REO/CWCOT auctions may have access available, but it is not guaranteed. At ServiceLinkAuction.com, you can view property information on the Property Details Page (PDP).
Secure Financing (If Considered)
When bidding on land at auction, you will often need to pay for the property upfront in all cash if you win the bid. For some, however, having a large sum of capital ready to bid isn’t always feasible, meaning you may need to secure financing. However, not all auctions will consider financing if you win the bid. For example, foreclosure auctions are cash only, usually in the form of a cashier’s check, and are due immediately following the auction. However, financing may be considered for Bank-Owned or Newly Foreclosed online auctions. At ServiceLink Auction, you can see if financing is considered by navigating to the Property Details Page of a property you’re interested in.
Prepare for Auction Day
The final step in buying land in a real estate auction is getting ready for the auction day. Confirm the date, time, and location. If you’re attending an in-person, Foreclosure auction, plan to arrive early. Arriving early allows you to check in with the auctioneers or any available staff at the auction site to ensure you are at the correct location and ensure that you are ready to bid. If you plan to bid online, make sure you know the auction window, as an online auction may be open for as little as less than a day or up to 3+ days. You can find this information and any updates to the auction window on the Property Details Page at ServiceLinkAuction.com.
What to Look Out for When Buying Land at an Auction
Because most properties sold at auctions are purchased as-is, sight unseen, it’s essential to know what to look out for to ensure you’re making a wise investment. Some factors to look out for when considering buying land at an auction include the following:
Soil productivity: If you’re interested in purchasing land for agricultural purposes, gaining information on soil productivity to evaluate the potential revenue the parcel may generate may be an important detail you need to make an educated offer.
Tax liens: You may be responsible for any tax liens on the property, which can add to the total cost of the purchase. Be sure to pull public records and any title information on the parcel if available.
Occupancy: Property, or in this case, land, amid the foreclosure process may be occupied, which means you’re not able to trespass and view the property. Additionally, this may mean you’ll need to deal with the eviction process should you win the bid.
The ServiceLink Auction Advantage
At ServiceLink Auction, you can bid on a wide range of properties through our online auction site. In addition to land for sale, you may place bids on properties in foreclosures, short sales, newly foreclosed, and bank-owned properties. If you’re interested in how to bid online or how to buy land at auction, contact ServiceLink Auction today.