How to Find Deals With Online Real Estate Auctions

Learn how to find deals with online real estate auctions.

Are you looking for a real estate deal?

Opportunities for real estate deals are everywhere. You can find plenty of real estate deals by using online auctions.

The inventory of bank-owned homes on auction sites is at an all-time high.

If you decide to use an online auction site, in addition to possible user fees, there might be a few hidden costs in a property for which you have a winning bid.

Read on to learn more about how to find deals with online real estate auctions and how to avoid a potential shock to your bottom line:

Difficulty:

Moderate

Instructions

1. Homes listed on auction sites are usually made public before the auction date. If you identify a property beforehand, go and inspect the property if possible. This will be your only opportunity to see the property before placing a bid. Auctioned homes are sold "as is." You assume the cost of all repairs or damage to the property. This can affect how much you will actually spend on a house in the end.

2. Run a title search on all properties available through an online auction. Though banks usually clear property titles before the auction, it is possible that one or more liens still exist on a title. Do not assume the title is clear. If you have a winning bid, you assume the responsibility for liens against a property. Liens can include past-due property taxes and fines, or unpaid contractor repair invoices. If there is a lien, ask the bank to clear the title. If the bank refuses, either cancel the transaction, or try to negotiate the costs of the liens into your final price.

3. Be prepared financially before an auction. You may need to furnish a down payment if required by the bank that owns the property. Some banks will require payment of the full amount of the property's auctioned price. If you can get a loan pre-approved for a certain amount, you will know ahead of time what you can work with, and save valuable time and worry at the end of a bid cycle.

4. Finally, when using an online real estate auction web site, read the site's terms and fee structure. You will be in a better position to negotiate with a bank if you understand the condition of the property, and any outstanding liens on the title. In some cases, you can lower the final settlement price using this approach.

5. While you're here be sure to take a look around for more information and tips about online real estate auctions.