All You Need to Know About Property Auctions
Gone are the days when one can only search real estate listing or work with a real state agent to buy a property in highly urbanized and modern countries around the world like the U.S., Singapore, countries in Europe, New Zealand, among others as property auction is one sure manner to acquire a good home at this contemporary times. Traditionally, one have to undergo a harrowing and daunting task of waiting for something to be sold — and sometimes, those that get to be available in the market are too pricey or are not even your style and preference.
“I wished I knew sooner that auction is a thing here,” said Sally Ming, a graduate school student working as an EFL teacher in Singapore, who have been wanting to check out property for sale since she moved in the city. “I know how auction can be fun and I have enough savings to buy a house here,” she continued.
Firstly, one has to be familiar with the types of auction for properties or real estate in general, “The two main types of property auctions are foreclosure auctions and tax lien auctions. Before a property reaches auction, several things have to happen. First, the homeowner doesn’t pay his mortgage for several months. Then, the bank files a notice of default with the county recorder. If the homeowner doesn’t pay the balance owed or renegotiate the loan with the lender, the home can be put up for auction. The amount of time it takes from when the homeowner stops paying the mortgage to when the home ends up at auction varies, but can be anywhere from a few months to a year or more. The other main way a home ends up at auction is when the owner doesn’t pay property taxes or becomes severely delinquent on state or local income taxes. In these cases, it is the unpaid tax authority (not the bank) that seizes the property,” wrote Amy Fontinelle for investopedia.com aptly titled Should You Buy a House At Auction?
While the auction participants have their own prepping and psyching to do before the auction itself, would-be property sellers do not exactly treat this job like an icing on the cake, “In accordance with auction rules and laws, there are several mandatory statements that an auctioneer must announce before the auction can commence. Once all legal announcements have been made, the auctioneer will proceed with describing the benefits of purchasing your property. As this is their last chance to engage the crowd and get them excited, they will often provide a detailed description of your property and list the valuable features and benefits,” shared advice.realestateview.com.au in an article titled Top Tips to Prepare You for Auction Day.
Fontinelle further wrote about the possible drawbacks of property auctions, “Properties being auctioned off aren’t necessarily hidden gems. If a property winds up at auction, it means the owner was having financial trouble, so the house may have deferred maintenance problems. It might even be completely trashed. Also, because of the financial situation the previous owner was in, there may be other liens against the home, like tax liens, contractor liens, or a second mortgage. Bidders can avoid this problem by working with an auction house to ensure that the property has clear titles.”