Earlier this month we sold the house next door to ours. It is a historic home that oozes charm, built in 1927, and designed by the first architect in Seminole County, Elton J. Moughton. A few years ago we had the experience of helping someone buy a home in the historic district of Sanford. Both[…]
Earlier this month we sold the house next door to ours. It was built in 1927, and designed by the first architect in Seminole County, Elton J. Moughton. A few years ago we had the experience of helping someone buy their dream home in the historic district of Sanford. Both transactions have inspired us to[…]
Have you seen the show Flip or Flop on HGTV? A husband and wife real estate team in California purchases homes at auctions with cash in order to renovate and resell them. We recently had a client who was interested in how real estate auctions work, and if they were a smart investment for her.
Home auctions and renovations produce high drama – they make for a good TV show, but are certainly a risky investment. Here are four risks you take when purchasing a home at auction:
Risk #1 – 10% Earnest Money
If you buy real estate at auction, you have to put 10% down and that is absolutely nonrefundable for any reason. You are committed from contract.
Risk #2 – No Inspections
All your inspections must be completed prior to bidding. You can’t really inspect the property before contract because usually the utilities are not on, and you are not guaranteed to win the bid. If you are buying with a loan, it is worse: no appraisal or loan contingency (and, you have to use the auction house’s lender).
Risk #3 – 5% Auction Fee
On top of your purchase price, they add a 5% auction fee. The auction house charges 5% premium and often an additional “technology fee” ($300 to $1000) for holding the auction to the buyer (in addition to whatever they charge the seller).
Risk #4 – Advantage to the Seller […]
Orlando Regional REALTOR® Association’s monthly market report is out! July closings increased over 33% compared to last year. When compared to July 2011, the July 2015 median price is 59.20% higher. Right now inventory is very tight with a pace of just under three and a half months of supply. The total inventory count is[…]