With the many auctions here and throughout the U.S., you may be wondering if it’s worth buying Santa Cruz real estate this way. Auctions let you bid at a public sale. Some property is being sold by the owner, but most properties are foreclosures being sold by banks.
Like any endeavor, there are pros and cons in buying Santa Cruz real estate at an auction. For instance, a pro for auctions might be the price; you can often get great discounts on nice homes through an auction. However, you may get caught up in the fervor of the bidding process and pay more for a home than you ever intended.
The Condition of the Home may be Questionable
When you work with a real estate agent to buy a home in the traditional manner, you go through the home inspection process. This ensures the home is in sound structural condition.
In an auction, you have to go with the timeframe of the bidding process and most likely will not have time to get a home inspection performed. In fact, homes sold at auction are sold “as is.” That means no improvements will be made to the home, even if you had it inspected and found something wrong. Additionally, there’s no warranty and no legal recourse to get your money back if you find problems later.
Tax liens can be Costly
In foreclosure auctions, a property may have a tax lien. If you win the auction, you may then become responsible for the payment of the tax lien. It could be a small or large amount of money, but no matter the size, you may not be able to afford it on top of the cost of the house.
Large Payments in Short Timeframes
Lastly, consider that full payment may be required at the close of the sale; if not full payment, earnest money will at least be required. Because closing usually happens within a month of the auction, it’s always best to be pre-approved for your loan before you start bidding.
If you’re looking at Santa Cruz real estate auctions for your dream home, do your homework first. You could end up with a fantastic deal, but, without enough information, you could also end up with a dead end.
If you’re looking for a great deal on a wonderful home, I can help. Call me today at 831.662.6522 or email me at Lauren@LaurenSpencer.com or visit my website at www.MySantaCryuzRealEstate.com for more information.