Buy smart at real estate auction

REThink Real Estate

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Q: I want to buy a house at auction. Do you have any advice? A: In days of old, like before 2005, most real estate auctions were trustee sales that took place before a home was repossessed. We Realtors had a standard set of admonishments we used to make about those auctions: You might get a deal, but you have to pay in cash and in full; you'll have no opportunity to have inspections; you may have to evict the former owners; and you could end up buying a place with a bunch of liens and other mortgages on it. These typical trustee sale characteristics barred all but the hardiest of cash-flush investors from participating. Fast forward a couple of years, and the recent spate of foreclosures has spawned a diverse new landscape of property auctions, each type with its own new-and-improved (maybe!) set of pros, cons and cautions. Before we get to what you need to know to be a smart buyer at auction, let's get clear on a couple of things. Why are you set on buying at auction? A...