San Diego Mortgage and Home Buying Tips
If you need tips and advice on San Diego home loans and home buying then you've come to the right place!
San Diego Home Auctions
Tips for buying a home at a San Diego real estate auction
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Buying a home at auction can be a smart investment strategy for San Diego home buyers. If you know what you are doing, you can often buy a home at auction for less than it would go for on the regular market. Here are some helpful tips for buying real estate at a San Diego home auction.
The Purpose of Home Auctions
San Diego Mortgage lenders are good at selling mortgage loans — they are not, however, in the business of managing and selling San Diego homes. So when lenders foreclose on a San Diego home they want to sell that home as quickly as possible. Sure, they want to recoup the full amount owed to them. But they’re not usually in it for making a profit. That’s why they auction homes off in a public fashion … to sell them quickly.
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Home Buying Tips for Public Auctions
In nearly all cases, the price for a home at a San Diego auction will be based on the amount owed to the lender (along with any other expenses the lender has incurred during the home foreclosure process). This is the appeal of San Diego home auctions in the first place — you can often buy homes for less than market value. Your task is to understand that market you’re in, so you can spot a good deal with it comes to an home auction.
So you’ve done your homework on the San Diego real estate scene, you’re attending a home auction and you’re eager to bid on a particular property. What about financing? How long do you have to come up with the money after bidding? This will vary from one auction to the next. So before attending a home auction in San Diego you should do your research on the financing process associated with that auction.
As with many other types of auctions, the most common financing “rule” for home auctions is that you have the money in hand so you can provide the funds upon successfully bidding. When you think of it from the lender’s perspective, this only makes sense. The last thing the lender wants is to put a San Diego home up for auction only to have the top bidder fall through with the financing. They would have to do the process all over again, or else contact other bidders.
Here’s what you need to take away from this lesson. Check with the auction people ahead of time to find out about the financing rules. And if you cannot meet those financing requirements … don’t bid on a home. Auction bids that cannot be supported with the proper financing create problems for all parties involved, including the bidder!
In most home auction scenarios, it’s also wise to avoid bidding wars. This only drives up the price of the San Diego home being auctioned. Many bidding wars are based on a combination of inexperience and ego in the person bidding on the home. The more bids that go back and forth, the higher the price of the home. So wait until the bidding has slowed down before making your own bid.
Lastly, it’s important to realize that most homes sold at public auctions are sold as-is with no guarantees or warranties. If you have the opportunity to look a home over before the auction, take it! Otherwise, just remember that you get the home you bid on, and nothing else in the way of warranty.
This is obviously an overview of the San Diego home auction process. It’s not my intention with this article to make you an expert in real estate auctions, but only to help you understand the basic process (and how you might use it to your advantage).
Good luck with your San Diego real estate purchase and home auction adventures!