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The stock market goes up and down, but one thing that successful investors all agree on is that real estate is a conservative and consistent investment. That means that it will always be a good way to invest your money. Many different types of property are sold at auctions. Properties that have been foreclosed upon are often sold at real estate auctions, and the proceeds from the sale go to pay back taxes and to pay off the bank who repossessed the property. But sometimes homeowners choose to put their own properties up for sale at a real estate auction rather than take the more traditional route of hiring a real estate agent and making a one-to-one sale. As a buyer, there are some things you should remember to help you make a profit at real estate auctions: You will need to have your financing pre-approved. You must be able to pay for the house you bid on before you bid on it. If you bid and can't secure financing, you may be liable for up to 25 percent of the total cost of the house and have no property to show for it. Find out which homes are up for auction. There are several ways to do this. You can call your local Realtors® or your local auctioneers. You can look in the newspaper under auctions or in the legal section where impending court actions are listed. You can also go online to look up auctions in your area. When you get the information about real estate auctions, decide which homes or buildings interest you. Always try to see and explore the home before you bid on it; at the very least drive by the house so you don't have to take the word of advertisements sight unseen. Think in terms of general condition of the house or building and the market for this type of real estate in the area—will you be able to resell this house? Is it in a good location for a business? Will you have to fix it up, and if so, can you recover enough of those costs through the sale? Have your own inspection and assessments done. Real estate auctions sell properties as-are, so you want to be sure the market value and any problems are clear from the beginning. Determine a maximum bid in advance and stick to it. The great benefit of auctions is that you can buy a property for a fraction of its market value. Don't use up that advantage by overbidding. Prepare your new real estate acquisition for resale. You will almost certainly have to do some work on the property, but it will also drive up the value.
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