Hunting For Commercial Property Auctions? Read This

Posted by jason michalak on October 21st, 2016

There is not only one traditional method of owning a property where your broker fixes the deal on your behalf with the seller. Today any and every kind of property is getting auctioned. From experienced real estate investor to any layman, everyone is interested in commercial property auctions.

Here are some benefits which makes it so attractive to buy a property in auction.

Cheap Prices

Properties out for auction are either foreclosures or tax lien. Either of them is available at discounted opening bids to lure the buyers. Due to certain risks involved, most of the times there are very few bidders and you may end up acquiring the property at a very cheap price.

Less Time

Buying the property at commercial real estate auctions is probably the fastest way to buy or own a property. With a certain fixed time line from the beginning you know the deal will get closed within the specified date; avoiding any delays or hitches.

Fair Play

When a property goes into auction, every minute detail related to the property is being documented to have an elaborate and fair account of the property. Details also include leases for tenanted property, searches, title deeds and any planning permissions. These details are published in the form of legal packs and are accessible to the bidders online.

Fair Deal

With competitive bidding happening in front of everyone, you are assured that there is not any backroom deal happening for the property and you have the same opportunity to own the property as any of the other bidders.

Having said that, there are also some drawbacks worth considering, before entering the arena of auction.

  • There may be properties which are not in the best of their shape and require huge maintenance and repair works. So, do your research about the property extensively.

  • Because of the broke condition of the owner, there could be other liabilities against the home like contractor liens, tax liens or probably a second mortgage.

  • Some auctions have a certain hidden reserve price which sets the limit on the minimum acceptable price. Know the terms and conditions carefully to avoid any last minute surprises.

  • In few cases, you will not be allowed to own the property even if you win the property. Banks simply do not accept the winning bid in subject to lender confirmation foreclosure auction.

Analyze the pros and cons carefully before putting your bet on an auctioned property.

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jason michalak

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jason michalak
Joined: April 6th, 2016
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