Purchasing a property at a real estate auction can prove beneficial if you're able to find a great home at a discounted price. However, you’ll need to take steps to make sure your finances are in order before proceeding. This guide explains how you can set a reasonable auction budget to ensure you’re prepared to move on the home of your dreams.
Why Preparing Your Finances Is a Must
Payment in full is usually required once you place the winning bid on a property, although some auction houses allow you until the next day to remit payment. Failure to provide payment in the timeframe required will cause you to lose the home. You may also be banned from future real estate auctions, which typically have strict rules.
If the auction permits financing, you must be pre-qualified before the bidding starts. Pre-qualification is similar to being pre-approved for a mortgage.
Factors such as income, debt, and credit score will be considered. If approved, you’ll be given documentation that you can show at the auction to prove you have the proper funding.
How to Set a Maximum Auction Budget
First, consider all the upfront expenses. Along with the cost of the property, you may also be required to pay to access the auction. You’ll also need to pay certain fees, including auction fees and expenses related to working with an attorney or a bank on the sale.
When seeking financing, be realistic about how much you can afford each month. The more expensive the property, the higher the monthly payments will be. You should also account for expenses like home insurance, property taxes, and repair costs.
With over six decades of experience and 2,000 completed real estate auctions, our team at Greenway’s Real Estate & Auction can help you find the perfect property for your budget. We have expertise in Virginia and West Virginia, with offices in Covington and White Sulphur Springs. Call us at (540) 962-1155 today if you want to learn more or text JOIN or LISTING to (540) 698-0883 for the latest news and information. To learn more about upcoming auctions, visit us online. You can also download our app, which is currently available on all devices. Let Greenway's Do It!