Contrary to popular belief, real estate auctions are actually quite simple to carry out, and prove advantageous to the seller as well as the buyer. Until a few years ago, the only way to sell a home was through a foreclosure sale, and this was a very lengthy process and it also involved paying a large amount of commission (around 10% of the value of the home) to the real estate agent who carried out the sale. Auctions soon came into public notice, and have been growing at a steady rate ever since.
A home seller will find an auction useful because the process is very quick. Moreover, the popular misconception that an auctioned off home will sell for a very low price has slowly been eradicated as well. The seller can set a minimum price that he expects for the home and then invite bids, and in most cases he will be presented with a price that is far greater than what he expected in the first place. Additionally, the sales commission that needs to be paid to agents is also absent in this case, and the seller really does not have to do much more than simply be present at the auction, and at open houses for potential buyers to see the home.
We all know that interest rates are still incredibly low. Also, home prices are perhaps on the rise, but remain very interesting. This does not, however, mean that any home is bargain waiting to be snapped up. The market is, at present, in favor of the buyer. However, don't buy without exerting due diligence. There are plenty of red flags out there telling you to move away from a purchase. Some problems can be fixed, of course, but sometimes you should just move on. Two things are of true vital importance, however.
First of all, check the neighborhood. It cannot be underestimated how important it is to check on this. Look into whether the community is growing and thriving, or whether it is declining. Signs of decline include numerous boarded up businesses and foreclosed homes. Experts say that it is best to visit the same neighborhood at different times and on different days. In doing so, you will also become aware of traffic. Make sure you come during an evening once as well, so you can find out whether there is any noise pollution or traffic problems when it is supposed to be quiet. Additionally, make sure the police provide you with a crime report on the area.
A number of things may also have happened to a property that are very hard to restore. Make sure you check for signs of the presence of water damage, pest damage, asbestos, mold and faulty wiring. The issue is that identifying these types of problems can be very difficult. The current owners may not even know that the problem is there. Those home owners that do know the issues are there will try to keep them hidden. All that needs to be done in order to hide problems like this is a bit of cleaning and reducing power usage. Besides organizing a professional home inspection, what you can do is speak to members of the community. They can tell you about the history of various properties in the area. It is safe to say that most major problems like pests, water damage and mold will occur in more than one home.
Basically, you should not purchase a property that has not gone through a professional inspection. With the information above, you should be able to find out whether you should walk away, or whether hiring an inspector is a good idea. If there are any existing problems, you may want to consider not buying the property at all, or asking for a very significant discount as you will have to invest in the repairs sooner or later. Make sure you take home inspectors' opinion on board too. Home inspectors will tell you honestly whether or not a certain property is worth investing in.
Yes, interest rates for mortgages are still as low as they could possible get. And yes, the prices of houses are still low enough to be very interesting. However, don't let this lead you into believing that any home purchase is a good one. Yes, we are currently in a buyer's market. However, don't buy without exerting due diligence. There are various red flags that will tell you not to buy a property. These problems are not always significant enough to tell you not to buy, but sometimes they are. There are two things you definitely have to look into.
Start by checking out the neighborhood. Is the number of homes and businesses dwindling? Ask people who live in the area whether it is a good place to live. Look at the land as well. Foundations could be damaged by rain water if the yard slopes downwards to the property. Noticing bad smells, both in and out of the property is problematic too. Next, check whether there are pests. If there have been bugs or insects, people in the street are likely to know about it, so ask them.
You should now look at the property itself and how it was treated. Signs of regular maintenance are hugely important. If you notice that there is a lack of structural maintenance on the outside, the inside will probably be the same. Also, look at the wiring. Although you probably won't be able to identify all of the problems yourself, some red flags are easy to spot. Flickering lights and hot outlets are major red flags. Similarly, if you notice that there is a single wall, or just a few walls that have been painted very recently, where others haven't, the owners may be hiding something. Also look at the windows. If there are signs of condensation or windows don't open properly, it could be a sign of serious damage that will cost you a lot to repair.Never even consider purchasing a property that you cannot see in full. Additionally, if you notice that any structural work has been done, such as the removal of walls or floors, you need to find out whether that work was done properly by a qualified architect.
The bottom line is very simply that a home should never be bought unless a professional inspector has given you the green light. The information above, therefore, is not designed to help you decide whether or not you want to buy, but rather whether or not you want to have it inspected. If any problems are present, you can choose to walk away from the property, or you can request a huge discount on the purchase price so you can arrange the necessary repairs. Do also consider the opinion of your home inspector. Their goal is to make sure you get a good deal on a property.
Home sellers don't always give you the full details of the property they are trying to sell. Unfortunately, hiring a professional inspector can get expensive if you are viewing multiple homes. Thus, here are a few things that you can spot yourself, telling you to avoid the purchase.
Start by checking out the neighborhood. Is the number of homes and businesses dwindling? Ask people who live in the area whether it is a good place to live. Next, look at the land. If you find that the yard slopes downward towards the property, it is possible that rainwater would run down it and damage the foundations. If you notice any bad smells, there is generally something amiss. Also look for bugs and insects. If there have been bugs or insects, people in the street are likely to know about it, so ask them.
Secondly, you need to know whether the property you are buying is a regular sale, a short sale or a foreclosure sale. Although it is true that these are the cheapest properties, they are also often in poor condition and in bad neighborhoods.
At the end of the day, you are the only one who an decide whether you will buy a property or not. However, make sure you exert due diligence at all times. Never purchase a property that you haven't had professionally inspected. If an inspector does find significant issues, you can decide whether you want to leave the property behind, or whether you want to bargain and bring the price down substantially. However, you do have to make sure that you don't purchase a true money pit.