Michelle and I met in a Facebook group, of all things. She was looking for someone to help her with auction properties and I’m one of the few people out there that know how to do that, so I reached out to her. It only took one phone call for me to know that Michelle was a special person with a huge heart. She wanted to invest her money in a home that would keep her daughter in the same school district but also allow her to care for an aging relative. Was auction the way to go?
The reality is: no, auction is not the right way to buy a house for most traditional homebuyers. Technology makes it easier than ever for buyers to have access to tons of information and the prices that they see on auction.com or on the Zillow pre-foreclosure property list seem too good to be true. ESPECIALLY in Portland’s hot real estate market. Buying a home at auction can’t be that much different than buying it through the normal escrow process, right? You might be surprised. Here are some of the things you can expect if you are looking to buy a home this way:
- You have to have cash (or hard money)
- You can’t get inside the house at all before buying it (except in very rare circumstances). Definitely no inspections!
- There is no escrow process. If you are the winning bidder the house is yours. No backing out!
- You may end up having to evict a very upset or angry owner or tenant
- Title may not be clear, leading to costly mistakes
- You have to physically be at the auction to buy, unless someone bids for you. And auctions frequently postpone so you may need to do this more than once
Auction can be an excellent tool to acquire investment properties if you are a seasoned investor. If you are a first time homebuyer you may end up biting off more than you can chew so be careful!
Once Michelle and I talked and she understood the realities of auction we shifted her search to listed properties. Finally, the right house popped up: there was enough space for herself and her daughter AND a detached cottage that was perfect for her grandfather. And the best part? She’s investing in a rapidly appreciating neighborhood and no longer paying rent. Congrats, Michelle! It’s been my honor to assist you.
Are you looking for an investment property? Give me a call!
Kim Parmon, Licensed Realtor in the state of Oregon- 503-438-5101