Real Estate Auctions Can Be Risky For Buyers
Buying Oakland Real Estate
The buyers market that we have been witnessing for the past couple of years has brought back the tactic of selling real estate at auction. Developers and Banks hold auctions to get rid of properties quickly, without having to wait for months while the property is marketed etc. Auctions usually draw large crowds, although usually only a handful of people actually end up bidding. There was one auction is Rockridge that brought 60 people, but only received ONE bid!
The most important thing for a buyer to know about most auctions, is that they do not allow for a contingency period for inspections, appraisal or your loan. This means that if for any reason you are not able to close (and close in 30 days or according to your contract) after having your offer accepted, you are subject to losing your inial deposit which most likely would be at least 3% of the purchase price. In a normal situation, you would have the safeguard of your contingency period to investigate the property and make sure it appraises. In an auction situation you are forced to buy the property as it is, with no ability to back out based on something you find after getting into contract.
So while auctions can represent an opportunity to get a good deal, they also are an opportunity to lose big bucks, and anyone considering buying real estate at auction should know what they are getting involved in by reading the instructions and contracts carefully.
Date: Saturday, March, 1st 2008 @ 04:30:38 PMViews: 172
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