Key takeaways
- Buying a home at auction may give you a lower price, but you could risk overpaying.
- Auctions are held online or in person, but you’ll need to show proof of funds in advance.
- Research the property in advance to identify red flags, such as liens or major repairs.
The homebuying process involves a lot of steps; however, there are non-traditional ways you can buy a home. One of these options is buying a home at auction. Buying at auction can move faster than a traditional sale, but it also offers fewer protections for buyers. If you’ve never heard of buying a house at auction, this Redfin article will outline the process for you. We’ll answer your questions about how real estate auctions work and what to bring on auction day. Whether you’re considering a home in Pittsburgh, PA, or are house-hunting in Raleigh, NC, here’s how you can buy a house at auction.
What is a real estate auction?
A real estate auction is a public sale of a property, either by a homeowner, homebuilder, the government, or a bank. Properties are typically sold to the highest bidder, though some auctions allow sellers to reject bids below a certain price. The most common type of auction is of bank-owned properties, where the bank auctions a home instead of selling it as a foreclosure.
Reasons homes may be sold at auction
Properties may be sold at a real estate auction for a variety of reasons, but these are the most common.
Foreclosure: Lenders or banks may assume ownership of a property where the homeowner has defaulted on their loan. They may sell the home at auction to recoup the money they have already lost.
Tax delinquency or other law violation: If someone fails to pay their taxes and owes the government a lot of money, or if they have violated some other type of federal law, the government can seize their property and then auction it off.
Estate sales: If someone has inherited a home they don’t want to keep, they may opt to auction off the home….