Online Real Estate Auctions

By: Jon Arcy

You can buy almost everything else online, so why not real estate? There are now more than a few online auction sites where you can buy or sell real estate. Consumers who originally may have thought of Ebay as a place to sell random items from their garage can now browse extensive real estate listings.

People often wonder, however, if it's really safe to buy something as high-ticket as a home or parcel of land over the internet. Nightmare scenarios are easy to imagine. You could, for instance, buy a home you've only seen online, only to find when you see it in person that it's about ready to topple over.

This brings up the subject of due diligence, which is a sensible course to follow in all business transactions, online or not. People have long been swindled in shady real estate deals, long before there was an internet. In some ways, a high tech environment makes it easier to take precautions.

Not everyone who browses online auctions realizes this, but a bid on a piece of real estate listed online is not a legally binding contract. This is because real estate transactions are regulated by local laws, and these take precedence. A bid is technically a show of interest. Looked at this way, it seems somewhat less daunting.

Online real estate auctions can be very convenient, saving you from making long and costly trips. The only catch is to do your own research after you've located something you want to bid on. You could quite easily, for instance, fall in love with a home on the other side of the country. Place a bid; this cannot hurt, but now do some fact-checking before making any final commitment.

As with traditional real estate transactions, it is often necessary to hire experts in the field, including real estate agents, home inspectors or perhaps a lawyer. Responsible internet auction sites, such as Ebay do provide safeguards against fraud. You can also check the sellers' feedback rating on Ebay before you bid. Additionally, payment processors such as Paypal protect buyers as well; check with their user policies first.

You have to use the same judgment, perhaps more, when buying real estate online as you would in person. Ask questions about vital issues such as the title, liens, general condition of property, electricity, sewer, well, plumbing, taxes, zoning, etc. You should also be familiar with the location where the property is situated. If you are not, you can find out quite a bit about almost any city or county online --population, economy, weather, crime rate, etc.

No matter how trustworthy you feel the potential seller is, do not assume that they are giving you 100% accurate information. In some cases, they may not even know certain things. You can always verify vital facts by calling local municipalities regarding legal matters or, again, hiring the relevant experts.

Sellers in real estate auctions have slightly less to be concerned about, but they too must be careful. The financial qualifications of a buyer must be verified, or you may end up disappointed. Be sure to find out anything about your property you aren't sure about (e.g. zoning laws, property lines) or you may unintentionally leave out or misrepresent something important.

Sellers should study listings in their newspaper or local real estate office to see how they are constructed. Avoid words that are vague or subject to debate and stick with as many specifics as possible --for example, state the exact size of a room rather than saying it's "large."

If you keep these precautions in mind, online real estate auctions can be very convenient tools. The key is not to oversimplify the process in your mind and think you can simply log-on, bid and buy without using any other resources.

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If you'd like to explore the world of online real estate auctions, take a look at some real estate listings as well as many investment properties
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