Purchasing properties the traditional way can be difficult, especially if you’re looking for a price that is suitable for a profitable flip instead of actually using the property for decades.
Luckily, there are real estate and land auctions that make accessing flip-worthy properties far more manageable.
If you’ve ever been to an auction or seen one in action, these work very similarly. Except, instead of bidding on someone’s old motorcycle or a locked gun case, you’re bidding on a home or acreage.
Both of these work the same way, as well. So, everything said in this guide will help you learn how real estate and land auctions work and is relevant regardless of the specific property auction you’re going to.
Getting into a Real Estate or Land Auction
Before you can start the bidding process, you have to know what auctions are available and when. This is fairly easy because most of them are publicly listed. You can search the newspapers, online listings, etc, and you’ll get a complete list of publicly listed auctions within the areas you’ve searched in.
It is important to note that these auctions can be held by two different main types of entities. The government can hold real estate and land auctions to sell properties that fall under government domain, and those are all publicly listed.
However, real estate companies and auction agencies like Auction Flippers can also hold property auctions. Since these are private businesses, they don’t necessarily have to list their auctions publicly. Most do because that’s the best way to get a large number of participants, but they can choose to hold unlisted auctions that are invite-only.
Auctions used to take place in local courthouses, auction offices, and similar places, but now, that’s not necessary. You can enjoy bidding on properties from the comfort of your couch with auction apps such as the Auction Flippers app.
Qualifying for an Auction
Once you’ve decided to participate in an auction, you’ll have to either have the necessary funding or take advantage of our flexible financing options.
Luckily, anyone can take part in Auction Flippers auctions. We provide 100% pre-approved financing in 3-month (no interest), 12-month, and 60-month formats.
However, you’ll also be able to pre-qualify for financing in most situations. At Auction Flippers, all of our clients are pre-approved for financing.
Whoever bids the highest and pays the technology in full will receive ownership of the property.
How the Bidding Takes Place
Once you’re set up and at the auction, land auctions work like any other auction you’ve participated in or seen. Sometimes, there is a starting price set, and sometimes there isn’t. Participants will take turns bidding on the property until no one is willing to bid higher.
Usually, the auction host will have a minimum increment set for bids. If that increment is in thousands, it means you’ll only be able to make bids in multiples of $1000. This is to keep chaos from breaking out with ridiculous $1 bids going back and forth for hours.
You can pay with a credit card or direct bank transfer, or you can even pay via Zelle. With the Zelle option, you will need to pay a $500 deposit up front, and the rest of the payment will be handled after the initial transaction processes.
Finishing the Auction
If you end up winning a property, you’ll have to pay a technology fee of $299. This compensates us for the services we offer to make these auctions possible (costs of marketing, transferring the deed, customer support, etc.). The rest is handled like a traditional property purchase. If you need help with handling auctions, contact Auction Flippers today!