Would you buy a home you’ve never even seen? People do.
September 23, 2009
On Monday of this week I worked as a contract signer at an REDC real estate auction down in Fort Myers, Florida. Real estate auctions are such a wonderful opportunity for investors to pick up really low-priced properties to add to their portfolios. Heck, they’re great for just about any buyer with a bit of cash in their pocket. Anyone with the right market knowledge and experience (or an experienced Realtor representing them) should seriously consider checking out the next auction. Email me at firstname.lastname@example.org if you have questions or need some advice on how to purchase through real estate auctions. They are fun, fast and potentially financially rewarding.
But on to the purpose of this post. It never fails to amaze and amuse me how many auction bidders bid on properties they have never even seen in person. I can’t picture a more foolish thing to do, but it happens every auction. These buyers are expected to have done their due diligence and visited each and every home upon which they are considering bidding. By the time of the auction they should know the condition and history of the property and neighborhood. But many people just don’t do their homework and they arrive at the auction virtually blind.
The way most real estate auctions work is as follows. Buyers are supposed to read the sales contract online before ever walking in the door. Once at the auction buyers aren’t expected to do more than skim the contract to verify it is the same contract they read previously on the Internet. There just isn’t time. Auctions are fast-paced and bidders are expected to be a bit more educated than the average home buyer. But this isn’t always the case.
In addition to reading and understanding the contracts prior to the auction the bidders are expected to have visited each and every property. Usually the listing agents will have set days and times where they open the auction properties up for potential bidders. While it is true that a lot of the listing agents don’t make seeing the house very convenient it still makes little financial sense to place a bid on something you haven’t seen. Think of all of the “surprises” a buyer could face in such a situation!
And here is the kicker. The contract clearly states that the buyer is NOT allowed access to the property between the signing date and closing. You would be shocked how many buyers sit down with me at the auction mumbling under their breath their intentions of doing a home inspection right after the auction and how the property better be in good condition or they’re backing out of the deal. There is NO access to the property for home inspections once the contract is signed. You sign…you buy. The contract doesn’t include verbiage about a home inspection contingency.
I’m done venting. It is just hard for me to sit there and do my job without wanting to help these people. When I act in the capacity of a Realtor my job, both professionally and ethically, is to help my clients navigate their way through the complexities of buying and selling real estate. But when I’m a contract signer at a real estate auction my job is to get signatures and not offer suggestions or advice. And I do this….as much as it hurts.