Real estate auctions have increased in popularity—and there’s a reason why. Most have offered amazing deals, and they’ve facilitated consumer-friendly environments for those interested in housing markets.
Unfortunately, a variety of myths surround the industry, and many are less than true. When going to a real estate auction, understanding misconceptions and debunking popular theory is important. You do want to get a great offer, become well-informed and make well-rounded decisions, don’t you? Check out the following real estate myths, and find out why they’re not true.
10. Homes Purchased at Auctions Can’t be Inspected
A popular starter, this myth is labored over by many accessing real estate auctions. Buyers are, however, granted numerous opportunities to access inspector and contractor assistance. Inspection, while not mandatory, is still a completely viable option.
9. Real Estate Auctions Don’t Deal with Brokers and Realtors
Actually, a lot of auctions pay realtor and broker commissions. Those bringing clients often obtain a decent pay-off, too.
8. Real Estate Auctions Cater to Distressed Properties
Consider this myth “busted”. While some homes are less than pristine, most are in well-standing condition. At the very least, those not within well-standing condition won’t be successful within auctions—and the auctions hosting them will likely be far and few between. Most auction-based households are new homes.
7. Real Estate Auctions are for Real Estate Owners Only
This myth is completely untrue. Real estate auctions are for the public, and most attendees are, in fact, local homeowners.
6. “Full Cash” or “No Purchase”
While most purchasers require an initial deposit, most have between 30 and 45 days to close an agreement. However, cash payments are rarely mandatory. In fact, “Sheriff’s sales”, or entirely cash-based purchases, are increasingly rare.
5. Bidding is Only for Attendees
Online bidding has become a recent commonplace within real estate auction communities. Bidders can even preemptively create online bids before auction dates.
4. Engaging in Home Auctions is Immoral
Morality isn’t considered where home auctions are considered. Nobody purchasing a home during an auction is “taking advantage” of anyone else. In fact, occupied households improve the economy, rather than jumping atop it during someone else’s life crisis.
3. Homes Sold in Auctions Cost Too Much Commission
This is incorrect thinking. In fact, most auctioned campaigns maintain similar costs than realtor costs. Auctions can save an individual money in the long run.
2. Homes Purchased “As-Is” Are a Mistake
False. While many auction-based houses are sold in pre-existing conditions, most contain fully-available inspection reports. Most offer warrantees, too. Due diligence is a prime virtue within home auctioning; auctions wouldn’t be successful if it weren’t true
1. Homes Sold at Auctions Obtain Lower Prices than Market Values
True market value is often derived from auction-based ventures. When comparable options are scarce, an auction group will likely determine a property’s “true value”—which might, in fact, be above market value.