Public and Private Auctions | Real Estate Law | Tressler & Associates
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Public and Private Auctions

The search to buy a home can sometimes feel impossible. If you aren’t having any luck finding the right property by looking the traditional way, there could be better alternatives that could help you find something just right. While public and private auctions aren’t a common way for most people to buy real estate, they are worth considering for some. However, while an auction could be the way for you to finally purchase the right home for the right price, there can be a lot of risks involved. If you’re going to buy real estate through a public or private auction, you need to have an experienced real estate attorney helping you through it.

While acquiring a home through public or private auction can be complicated, it can certainly be worth it. If you’re interested in buying a home in a public or private auction, contact Tressler & Associates for help. Our experienced real estate attorneys can give you all the assistance you need to buy a home at auction.

How Do Real Estate Auctions Work?

In a public or private real estate auction, you purchase a home by bidding on it. There are several reasons a home might be sold at auction rather than the traditional way. In many cases, these homes are sold at auction because the owner has defaulted on their mortgage or not paid their property taxes. Home being sold at auction could also be part of an estate sale.

How a real estate auction works can vary greatly depending on the type of auction it is. The three common types of real estate auctions include the following:

  • Absolute Auctions – If you’re buying a home in an absolute auction, you could buy it for virtually any price. The winning bidder of an absolute auction is whoever bids the highest price, which could end up being extremely low if there isn’t much competition.
  • Minimum Bid Auctions – Unlike an absolute auction, this type of auction has a minimum bid announced ahead of the auction. If you’re a bidder in this type of auction, you’ll know in advance that you’ll have to bid at least this amount to win the auction.
  • Reserve Auctions – While in other types of auctions, the person with the highest bid typically wins, sellers can accept or reject a bid in a reserve auction. In a reserve auction, the seller often has a price in mind but doesn’t provide this information. Sellers may reject a bid if it isn’t as much as they want.

Pros and Cons of Real Estate Auctions

Pros

The biggest reason why many people buy property through a real estate auction is that it can be a great way to get the best deal. Auctions are popular for selling real estate at a bargain, so you could get a house this way for much less than with a traditional transaction. In many cases, homes being sold at auction are trying to pay off a debt, so they’re often in a hurry to be sold for however much is necessary.

With fewer people buying homes this way, you could also have much less competition. Of course, the competition you do have may be experienced in buying homes at auction.

Cons

For many real estate auctions, you likely won’t be able to tour the inside of a home like you typically would. This means you could be taking a huge risk if the property doesn’t end up being what you wanted or could be in need of serious renovations. If you’re willing to take a chance on a home you won’t get to see, an auction could be worth it.

Public and private auctions also might not be right for many buyers because unlike purchasing a home the traditional way, you could have to pay in cash and give up some of the protections home buyers typically have. This is why you must carefully read over everything when bidding on a house at auction to ensure you know what you’re getting yourself into.

Be Prepared When Buying a Home at Auction

Public and private auctions can be a great way to buy a home, but you need to know what you’re doing and have the right assistance. Whether you’re experienced at purchasing real estate at auction or you’ve never done it before, it’s essential that you work with a real estate attorney. At Tressler & Associates, we can look over all the details of the auction and help you as you decide whether or not to bid on a home.

Contact our real estate attorneys today to learn more about how we can help you during real estate auctions.

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