3 Things you must do before buying a home up for auctionPosted: Updated:
PHOENIX -- With the housing market in the tank, more Valley homes are going on the auction block.
"We usually get them 65 to 70 percent market value now that the market's gone down so much," John Ray said. "Now is the time to start buying because prices are down."
Ray is in the business of bidding on homes and is out on the courthouse steps every day purchasing homes that are being auctioned.
But although Ray knows what he's doing, many folks don't.
"You could make some mistakes and end up buying something that could come back to haunt you," he said.
"I would advise against just willy-nilly attending an auction and bidding," said Carl Cunningham, president of an Arizona auctioneer company.
Cunningham admits auctions can be a good way to buy a home, but only if you know exactly what you're doing.
The reason? Because bidding on a home at can sometimes be a gamble.
"It's kind of like buying a box of chocolates, you just don't know what you're gonna get," Cunningham said.
So Cunningham says before attending any auction you need to do three things. First, read the auction terms and conditions fully because every auction's terms are different.
"If you read the auction terms and conditions, fully 90 percent of the buyer's questions can be answered," he said.
Number two, do your research prior to the auction. You need to know what you're getting into.
"Most auction companies have a very strict as-is purchase policy," he said. "Hire a third-party home inspector to let you know what is wrong with the house, what needs to be repaired in order to make it livable."
And finally, have your financing available and ready to go. If you don't, that awesome house may slip away.
"Most auction companies have policies in place that specifically have you come up with the balance of your bid within 48 to 72 hours after the auction," Cunningham said.
If you don't follow these few simple steps you may encounter a very sour situation.
"You can end up with a lemon," Cunningham warned.