SGI Realty One Real Estate Blog

There seems to be a fair amount of bidding taking place in the real estate auction sections of online auction companies. Some sellers are taking bids for a down payment, with the intention of owner-financing the property after the auction closes. For some auctions, your bid becomes the first payment in a lease-option agreement. Other sellers are simply trying to sell a property outright.

It's a little frightening to think that someone would buy property sight unseen, no matter how inexpensive it is.

· Serious deed and title problems could exist (liens, foreclosure and other claims)

· The property could be totally inaccessible.

· Structures could need massive repairs.

· It might not be possible to bring utilities onto raw land and you might not even have the right to dig a well.

There are hundreds of things to consider, and if you're not familiar with the area the property is located in you won't have a feeling for the common problems that can plague properties there--so you won't know which questions to ask.

The Safety Buffer

The good news is that real estate auctions on eBay, Yahoo! and other similar online services are not legally binding. Those companies are not true auction house that are licensed or qualified to sell real estate. The service they offer is simply an interactive advertising tool, one that sellers can use to connect with potential buyers.

After bidding closes, buyers and sellers get together and attempt to work out a true real estate contract that adheres to the laws of the state where the real estate is located.

The Bottom Line

Follow the links to read each auction company's rules. Policy guidelines are sometimes buried deep in the Web site, so you must dig a little to find them.