After the application of a home loan, you will receive two documents, a loan estimate, and closing disclosure. On the surface, these documents are identical but they both serve slightly different purposes. Up Next: Expenses To Expect In The First Year Of Homeownership Here is what you need to know about the differences between these […]
Should I Sell My Home at an Auction?
You want to sell your home, but are unsure what the best route is. Should you sell it traditionally or auction it? There are benefits to auctioning your home rather than putting it on the market traditionally. Not only for you, but for your buyers.
Benefits to Sellers
When selling your home at an auction, it will accelerate the selling process so your home isn’t sitting on the market for months or even years while you wait for a buyer. As a result, you will know when the sale of the home will take place, and won’t have to spend money on it for taxes and maintenance while waiting for it to sell. Sellers also know that the buyers are qualified to buy the home, and are serious about it, as many auction companies require bidders to be credit-worthy before being accepted as a bidder.
By selling your home at auction, you will be subject to the auctioneer’s decisions. For example:
- When to hold the auction
- Where to hold the auction
- How winning bids are decided
You’ll also need to pay auctioneer fees. Generally, the lower your home is priced, the higher the fees, but it will vary from state to state. You can also be stuck with an unfavorable winning bid, but once the home is sold, you cannot back out of the sale.
Benefits to Buyers
At an auction, buyers know that they are getting the market price for the home and that you are serious about selling. Therefore, they will be saved the trouble of long negotiations and the possibility of the buyer backing out at the last minute.
Unlike buying a home traditionally, buyers will need to have financing and their purchasing money ready at the time of bidding. If they don’t, then they cannot purchase the home. Buyers are also responsible for all the research and financial planning beforehand.
Finally, buyers must also be aware that the home may have liens or unpaid taxes on it and they aren’t allowed an inspection other than a quick once-over before bidding begins. When a buyer wins the home, they cannot back out of the sale—even if the buyer discovers that it has thousands of dollars’ worth of renovations.