5 Tips for buyers at real estate auctions

Opportunities to buy homes at auction are on the rise. Some experts say the share of homes sold at auction could double this year.

Ben Anderson, a real estate auctioneer and member of the National Association of Realtors and the National Auctioneers Association, predicts auctions may make up as much as 15 percent to 20 percent of all real estate sales given nationwide foreclosure rates. Traditionally, auctions represent just 8 percent to 10 percent of such sales.

Tips for buying at auction:

• Conduct due diligence in advance of the auction. Inspect the property. Review any available documentation, such as previous inspections, appraisals, seller disclosure statements.

• Review the title search. The seller’s representative usually requests this at the time of the listing.

• Arrange for financing. Clarify with the lender the qualifications and the amount available for a loan.

• Review the terms and conditions of the auction. Before auction day get a copy of the purchase agreement and the auctioneer’s terms and conditions. Read and understand them.

• Know the market. Check comparable properties and what they have sold for, and analyze nearby listings.

Anderson says auctions typically involve cash transactions, but cash isn’t always king. House sellers can agree to financing arrangements.

by the Denver Post, Christian Toto