Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Buying at auction is not for the inexperienced, but I'm sure you've been told all the pitfalls that can cost you more than your savings at auction.
There is no rhyme or reason to the the winning bid. You will be up against investors with cash, as well as, potential buyers that have been bird-dogging specific neighborhoods. If no one is bidding on a home, chances are, there are good reasons why not.
Your question is not only regional, but interest rate sensitive as well. When rates are low, buyers can get more expensive homes. Few are prepared to renovate from the first day and only come to auction as a last gasp. I've seen winners come away anywhere from 80% off market value (once and in 2008) to the more common 30% below appraised value (we think). Why do I say "we think?" These buyers paid cash and were not eligible to refi (replenish their cash) until they had owned it for 6 months - so our appraisal was not effective as of the date of their purchase. Remember, many areas have been declining up until this year (and many still are).
May I suggest you go to the auction and track what sold for what? Drive by the (or a couple) homes after and note the exterior value, then check the assessment records and nearby sales. (Frankly MLS dot com has pretty good data). And do this more than one or twice, or more. You'll soon get a better idea how much your area is seeing discounted in value by attending auctions.
I have also seen homes at auction sell for the full amount due, which can be 200% of the appraised value, or even more. I have even seen them sell for the full amount due + all legal fees. So you will look at a house and think "ok, that is worth $120k in today's market", and it will go back to the bank at $300k.
If you go into it thinking you can "expect" anything on auction pricing, you have the wrong mindset.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.