3 Tips For Your First Foreclosure Real Estate Auction
Buying a home at a foreclosure auction can be a great way to get an amazing deal on a home, especially if you are in the market for your first fix and flip investment property. It pays to come to your first auction as prepared as possible, to prevent over-spending or making a bad investment. Here are a few ways to prepare for your first foreclosure real estate auction:
You Can Still Work with a Real Estate Agent
Some first-time investors believe they have to go it alone and pay cash when purchasing a foreclosure home, but in reality, you can work with a real estate agent just like you were making a conventional purchase. When you find a foreclosure property you are interested in, your real estate agent can research it for you and let you know what comparable homes have sold for in the neighborhood.
They can read over all of the auction paperwork before you pay anything to ensure it's a good deal. Finally, your real estate agent can help you work with a mortgage broker who specializes in foreclosure properties to see what, if any, financing options are available to you.
Have a Maximum Budget in Mind
Sometimes first-time auction buyers get caught up in the competitive spirit of the foreclosure auction and bid more than they can afford in order to win. To prevent this, it's important to have a maximum budget that you know you can't go over. Work with your real estate agent to identify and factor in fees, including the real estate agent's commission, closing costs, and any fees you will need to pay to the actual real estate auction company.
Minimize Your Risk
In a foreclosure auction, you are not typically allowed to see the inside of the home before bidding. For this reason, it's very important to find ways to minimize your risk. For example, be very conservative when estimating how much money you will need to spend restoring and renovating the home.
Imagine a worst case scenario, and then maybe you will be pleasantly surprised to discover the home isn't in as bad of shape as you anticipated. In some cases, your real estate agent may be able to convince the bank who owns the property to let you inspect the inside before the auction, especially if they are very motivated to sell.
By following these tips and showing up to your first foreclosure real estate auction in a calm and prepared state of mind, you will improve your chances of making a savvy real estate investment. Contact a realtor that works with real estate auctions for more information and assistance.