Who buys homes through Auction?

[Tanya Maslach]

Hi all!

I found a deal through auction (3/3 1427 sf, Colorado) - $177K.
I wondered if anyone had purchased this way before, and what landmines should I be aware of?

Thank you!
T

[Jonathan Greene]

You shouldn't be buying via auction as a new investor. End of story.

If you are talking about courthouse auction, those are cash only, ten percent due at time of sale and the rest within ten days usually. You will not get all of the liens confirmed - there can be HOA liens, tax liens, utility liens, anything. You also will not be able to see the house and no one should buy sight unseen without a history of doing it.

If you are talking about Auction dot com or Xome or Hubzu, those come with a buyer's premium on top of the sale price between 5-10% and often have ghost bidders in the system so you will see it keep getting reset to hit a higher bottom.

As a new(er) investor, auctions are where you go to lose money and take on excessive risk. And most are all cash deals.