Friday, October 21, 2005

Private Auctions An 'Amazing Trend'

Newsday has an article on auctions and tax liens. "Real estate auctions of all kinds, though not new, have become a popular alternative to conventional house-hunting, real estate experts say. Besides the lure of snagging a good deal, investors like seeing properties most buyers may not know about, says Barbara Karnes."

"'Private auctions are very popular and effective,' Karnes said. 'Within the last year it's been an amazing trend.'"

"Whether you are attending private high-end auctions or public foreclosure auctions, or auctions held by estate, tax assessor or public administrators, experts say it's important to do your research before you raise your bidder's card."

"The planning begins with how much you think the property is worth and what you're willing to pay for it, said Michael Fine. 'Decide before the auction how much you're willing to spend on the property and stick with it,' says Fine, adding that at an auction you have to be prepared to decide within minutes what you're going to spend."

"Bidders also have to factor in the auction commission. In private auctions, the seller typically pays the auction commission, but the seller can tack on a buyer's premium fee that's added on to the bid, usually in the 4 percent to 10 percent range, as stated in the documents given to the bidder before the auction."

"Pre-auction planning means researching the stats, specs and history about what you hope to buy. For foreclosures, Karnes recommends going to the county clerk's office and researching the deed and mortgage information on the property, making sure there are no outstanding liens or tax bills you may wind up inheriting with the purchase."

"Another advantage for buyers at auctions is that they can find out immediately how much their competitors are willing to pay for a property, something they never know when they are making offers to sellers in a traditional home-buying process."


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