Buying Home from Auctions?

[Josh H.]

Hello,

My wife and I have completed about 30 flips, 25 or so have been from the MLS and the other few have been off-market deals presented to us by wholesalers. We were recently networking and someone told us about buying homes from auctions. It sounds intriguing and like it could be a another good source from homes since the MLS has been pretty dry lately/hard to make houses pencil out for flips.

Is buying from auctions a good idea? Could the prices be lower than the MLS? And is there anything that we should be mindful or know about the dangers of when it comes to buying from Auctions?

Thanks,

Josh

[Jaron Walling]

This question seem pretty naïve for someone that's flipped about 30 houses. 

The answer is no. The auctions are just as dry as the MLS and wholesaler deals. What ever you're doing to find/buy/create deals is working. Keep doing it.

PS; What ever I'm doing isn't working because we haven't bought anything. 

[Josh H.]

Quote from @Jaron Walling:

This question seem pretty naïve for someone that's flipped about 30 houses. 

The answer is no. The auctions are just as dry as the MLS and wholesaler deals. What ever you're doing to find/buy/create deals is working. Keep doing it.

PS; What ever I'm doing isn't working because we haven't bought anything. 

Thank you for your rude and unhelpful response, Jaron. I have flipped 30 houses, including having 10 projects going simultaneously, one of which sold for $1.8 million. But I haven't done anything through auctions yet, as I have not purchased through an auction up to this point. Hopefully someone else will actually have something positive to contribute, instead of a rude response that adds no value, and just adds to post count.

[Evan Polaski]

@Josh H., I believe the heart of Jaron's comment is: in general, you will not find much better deals at auction.  Does this mean you won't find a deal?  No.  But, it is not some holy grail of great deals that will overflow your pipeline of possible purchases.

So, if you are needing a deeper pipeline of deal flow, yes, auctions can be another place to look for deals. Could you end up finding one or even multiple deals at auction? Of course. But for many people, it is one of a number of sources of deal flow, to add to MLS listings, wholesalers, direct owner outreach, auction, etc.

Assuming you are specifically talking about sheriff auctions, just make sure you familiarize yourself with the general procedures for the auction.  Each jurisdiction is different, but typically include a substantial deposit due same day up to full price deposited that day. 

[Zachary Deal]

Hi @Josh H. we see lots of success with investors buying houses from auction. From a lender standpoint I think the main areas of concern with auction properties boils down to access. If you don't get access to the property before closing it can be tricky but if there are recent photos online or you can walk through before and take your own then it is much easier. Same day auctions of course are not going to be possible for a lender to lend on the initial purchase but you can often get the same hard money purchase terms right after closing if you're able to buy in cash