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Navigating Real Estate Auctions

Buying a home at a home auction is not a new process, but it’s one that’s unfamiliar to most. There are lots of myths surrounding home auctions, and plenty of people who think of a home auction as a last resort, rather than a first choice.

RealtyHive is here to clear the air. Knowing about home auctions could make your next home purchase easier—and could even save you money.

Types of Home Auctions

If you think a home auction only happens in the event of a foreclosure, you’re not alone. However, there are actually multiple types of real estate auctions:

Short Sale

Foreclosures are time-consuming and expensive. When a homeowner owes more on their mortgage than what the house is worth, they might have the choice to put their home up for a short sale auction and avoid foreclosure.

From a buyer’s perspective, this type of real estate auction has its pros and cons. Home inspections are a toss-up—you might be able to get one, or you might not. Oftentimes, these sales are cash only, which works great for some, but isn’t ideal for home buyers needing to finance the purchase. Short sale auctions are also difficult to find for regular home buyers.

Sheriff/Trustee/Federal Sale

The name changes depending on location, but this is a foreclosure auction. The bank wants to get the money or the property. If you’re able to purchase, you’ll need to have the funds right away and there are typically no inspections. More often than not, you’ll buy without even getting to see the site first.

Auction

Regular real estate auctions happen at the seller’s choice—they’re not foreclosing or at risk for it. Interestingly enough, this type of home sale happens a lot in Europe and Australia. Home auctions are just beginning to pick up speed in the US.

Auctions can have high fees—15% at the highest. Whether they’re paid for by the seller or the buyer depends, so as a buyer, your expenses could dramatically increase. These fees do not include working with a real estate agent—an additional 6% commission on average.

That being said, luxury properties often sell faster at an auction than if going the traditional route. If you’re looking to buy an average/regular home and are in the US, it will be harder to find one through real estate auctions.

Time-Limited Events

This is an exclusive home auction, available through RealtyHive. Here are some of the draws:

Benefits of Time-Limited Events for Home Buying

  1. Don’t require a reserve

    The market helps find the right price.

  2. Contingencies are still allowed

    Buyers (and their potential investment) are still protected.

  3. Traditional financing

    Unlike other auctions, buyers can still apply for loans to finance their home purchase.

  4. No crazy fees

    Buyers are waived from having to pay expensive fees.

  5. All properties

    Time-limited events work for all types of properties, including vacant land and commercial properties.

Banner with white man standing in front of house with text "Buy. Sell. RealtyHive."

At RealtyHive, we truly think we offer the best home auction option on the market. The countless sellers and buyers who have worked with us would agree. 

But don’t feel as though you have to take our word for it—this blog is for information purposes, not a sales pitch. No matter the buying route you go, it’s good to know how home auctions work.

Can I Sell My Property Online?

When you’re ready to sell your house, there are many routes you can go—particularly in the online realm. Selling properties online is convenient (and can even save you money), but which option is the best? RealtyHive is here with the answers—learn about online real estate sales, home auctions, and more in today’s blog.

RealQuick: Do I Need a Real Estate Agent?

If you want someone to take care of selling your property from start to finish and minimize work on your end, a real estate agent might be a good choice. However, avoiding a real estate agent can save you up to 6 percent in commission. If you have the time, going the FSBO (for sale by owner) route can save you money that would otherwise go to an agent, and still sell your property. 

Online Real Estate Databases

PROS: Convenient, “free,” easy to navigate

CONS: Can still end up working through an agent, takes time to create a great FSBO listing

Using online real estate databases make selling your property easy. Some sites may require a small percentage commission or a flat-rate fee. Sites like Zillow and Trulia are free to use, but this comes with a slight catch. Zillow and Trulia make their money from advertising, which can put real estate agents ahead of your property. If a buyer wants to go through an agent, you could end up losing money.

Additionally, you’re in charge of your online home sale. You have to do the staging, photography, and marketing for it—free online real estate databases are just the platform.

Personal Online Marketing

PROS: In your control, free

CONS: Time-consuming, may only reach a smaller audience

Posting up your FSBO listing on Craigslist or even Facebook Marketplace is a totally free option. It can be nice to see who’s interested in your community, especially since not everyone in town is likely to pass by that “For Sale” sign in your yard. However, you might not be able to find as reliable of buyers, and your listing won’t be seen by nearly as many people. This is because Zillow and Trulia account for the majority of people looking online to buy a home.

Home Auction Sites

PROS: Efficient process, attracts serious buyers

CONS: Selling price is not a guarantee

Home auctions have grown increasingly popular—sales through auctions have increased roughly 25 percent each year. While they once were usually associated with foreclosure, auctions have been deemed a reputable and even preferable selling option. They’re much faster than most selling methods, plus they’re great for selling in a slow market (and can help you save money). Auctions also attract serious buyers, which means your home can be on the market for a shorter period of time.

Additionally, home auction sites like RealtyHive offer marketing. You won’t have to worry about professional photography and marketing your property online to attract buyers and get the best price.

Some auction sites do “absolute auctions” where the house is sold to the highest bidder, whatever the price may be. RealtyHive does things differently. If sellers aren’t satisfied with their home’s auction bids, they don’t have to sell. On the flipside, the property can go for even more than what the seller thought to list it for.

Banner with white man standing in front of house with text "Buy. Sell. RealtyHive."

There are multiple ways to sell your house online. If you’re looking for an efficient, reliable, and potentially money-making process, RealtyHive is your answer. We are a licensed, online auction site that anyone can use. Contact RealtyHive to learn more about how to put your property in a time-limited event!