How do you secure funds to purchase properties at real estate auctions? I have found a home going up for auction next month that I would like to bid on. Do I have to get a loan before I go and bid? If so how does that work, seeing as how I don't know what the price might end up being? thanks for any info.
2006-08-09 20:43:42 · 3 answers · asked by The Deal Man 1 in Business & Finance ➔ Renting & Real Estate
auctions *
2006-08-09 20:45:01 · update #1
The terms of auctions are cash or the equivalent.
Sometimes there is financing available on the spot, but it's rotten terms.
Most often, you have to have pre-arranged financing if you need it. Since you're asking a lender to trust you without verifying the property, it's typically a personal letter of credit. The terms for these aren't much better than on the spot financing.
Lots of people want to get into foreclosures, but it takes a certain amount of cash you are prepared to lose. This stops the vast majority of those who have this idea dead in their tracks.
2006-08-10 03:41:00 · answer #1 · answered by Searchlight Crusade 5 · 0⤊ 0⤋
You must be prepared on the day of the auction to put 15% down. To do this you must estimate the value of the property and what you are willing to pay for it. For example...if your guess and budget is $100,000. Then be sure to have a cashiers check for $15,000. However if it sells for $50,000 and you win the bid, then you can let the additional money go towards purchase fees, extra payment/principle, or the auction company can refund the $
2006-08-10 04:11:59 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Banks will offer loans for this, but they are harder to get. I is easier to find a real estate development company to partner with. Use there money.
2006-08-10 03:49:46 · answer #3 · answered by Jon H 5 · 0⤊ 0⤋