Buying real estate online may be a growing trend, but do research before hitting the virtual auction block
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Jewelry, collectibles, furniture and just about everything else can be sold in online auctions. So why not real estate? Input the words "online," "auction" and "real estate" in your search engine, and, like anything else, the results are seemingly endless. All of a sudden, home buying might be as easy as a click of the mouse.
Online auctions for homes and condos have been growing in popularity for the past decade. They can be an unexpected way to find smart deals, especially where foreclosed properties are concerned, as auctions of homes vacated from foreclosures have shot through the roof in the wake of the housing crisis. But like any real estate purchase, there is a lot of research that must be done.
Some sights have free window-shopping without having to sign up for an account. This will give you an idea both of the quality of properties for sale and the reliability of the Web site.
Additionally, sites will go through their step-by-step procedures on bidding and even selling.
Buying properties sight unseen might make for a good value, but it can be risky if you haven’t asked all the questions that you might have had you toured the property in person. There are lots of questions to ask before heading into this venture.
You want to be confident in the seller. If you are able to, look into the neighborhood to make sure that nearby businesses, schools and other amenities are up to the standards you’re expecting. Fine tune the details when learning your payment options. At the same time, look into comparable properties elsewhere (online and in person), and make sure that what you’re considering is the best value.
There are a number of reputable sites for online real estate auctions out there, including Hudson & Marshall and Realty Bid. And yes, even eBay has residential properties listed. If you plug in your city into the search, and add "foreclosure," a host of other sites pop up. Self-education is crucial to make sure you know what you’re heading into. Go over the reviews and testimonials of the auctioning sites. Being proactive at researching your options and details will give way to snagging a potential steal of deal from the online auction block.
There are several ways that online real estate auction bidding happens, but most often, it’s done as a flat bid, with you placing your bid manually and then another one each time you are outbid. Some sites allow for what’s called an auto bid, and you can designate the maximum amount you’re willing to bid for a certain property, and your bid will be increased only as others bid against you. Your high bid will be confidential. Just don’t expect to bid $5 on a house and win. Most sellers will have a reserve price that will be the minimum bid on the property. If that isn’t the case, then sellers can deem certain bids unacceptable.
Fees beyond the seller price are still associated with the purchase, much as if you were going through an agent. Closing costs, lender fees and perhaps even a fee paid to the hosting auction site. Who pays those fees is usually determined in the terms of the property’s contract. The contract is also where other financial responsibilities are detailed.
Most importantly, just like with any other online auction, have all your preparations ready to bid prior to signing on for anything. Be confident in your bid and make sure that, should you win, you’re ready to close the deal.
Nobody likes an online auction winner who chintzes out. When you’re bidding on costume jewelry, no one really pays much attention. An ocean-view condo in South Florida well, that’s a different story. You may not get a new pair of concrete shoes if you back out, but a hefty fine will be owed to the auction site. The same can be said for a seller if he or she pulls out after a winning bid has been selected.
For more information, visit HudsonandMarshall.com or RealtyBid.com.
That’s some good advice
Real estate is about property, and there is lots of it online. Beyond buying a new home, online auctions run the spectrum from farm and ranch land to high-rise condos.
Just don’t think you’re cutting out the middle-man entirely. Once you find your property, have a real estate agent give it the once over. They may not be too happy to be out of the loop, but at least you can get a professional eye to notice anything you might have missed.
This article appeared in the Dallas Voice print edition March 5, 2010.