Home auctions are a chance to buy property at a bargain.
Buying real estate at auction can save you tens of thousands of dollars. The downside of real estate auctions is that you often have to pay for your purchase in cash. That means that getting a mortgage may be out of the question. However, coming up with cash to purchase a real estate property being auctioned off may not be as impossible as you may think.
Instructions
1. Do your research. Once you find a property you'd like to purchase at auction, look at public records to see what similar properties in similar neighborhoods have been sold at auction for. This will give you an idea as to how much cash you'll need to purchase your desired piece of real estate.
2. Look at your own finances to find sources of cash. For instance, you may have money stored in money market accounts, certificates of deposit, annuities and investments that can be cashed in. Another potential source of cash may be your retirement account.
3. Sell anything you don't need. For instance, that motorcycle that's been sitting unused in your garage for months, or the boat you've lost interest in, might provide significant influxes of cash.
4. Tally how much cash you can come up with on your own and estimate, using your research from Step 1, how much more cash you're likely to need.
5. Borrow the remainder of the cash. Turn first to trusted family members and friends who may be in a position to help. Next, consider taking out a personal bank loan.
6. Find a hard money lender if you are unable to borrow the cash needed for the real estate auction. Hard money lenders are private investors willing to hold the note on a piece of real estate, but usually require a significant down payment and charge sky-high interest rates. Also, these lenders are few and far in between.
