Private real estate auctions allow you to buy real estate at an auction. You’ll bid against other potential buyers, and the prices are lower than when trying to buy a traditional home. But there are some times when the bidding goes much higher than the starting bid, and one bidder will bid much higher than market value.
What Are Private Real Estate Auctions?
Private real estate auctions are often clubs that allow you to join and bid on exclusive properties. The difference over a normal buying process is that you’ll be able to land a home before anyone else – or a piece of land for that matter.
When you become a member of an auction club or you go to a private auction, you get first dibs on the property. But you’ll need to find these auctions, which are often provided through realty companies. Exclusive clientele offer their properties through realty companies, and banks also offer these auctions.
Banks that have a property that goes into foreclosure will often auction the property off for abysmally-low prices. Holding onto a property is not a lucrative option for lenders, except for in exceptional cases. Banks don’t want to have to worry about the upkeep, and selling the property even at a breakeven point is the goal of banks with a portfolio of foreclosed properties.
Just keep in mind that these private real estate auctions are normally on a member basis.
Where to Find Private Auctions
It’s not difficult to find public real estate auctions, but it can be difficult to find private auctions. Investors will leverage both of these auction options so that they have an abundance of real estate at their fingertips to find the right deal.
The truth is that the right deal can be found at both public and private auctions. But the private auction is more exclusive, so you’ll have a higher chance to land a property than you would with more people bidding in a public auction.
Finding these auctions can be difficult, and you’ll find that auction listing services work well. Private auctions will require either a small payment to be able to partake in the auction, or the companies that run the auction will require you to become a member first. The good news is that most of these auctions will be promoted through the company’s website – the way you’ll find the auction in the first place.
Search for Auctions Online: Private auctions are often listed online with their registration details. A quick search for “private real estate auction in New York,” or whichever state you’re interested in buying in, will do the trick.
Developers: Many developers will hold an auction for their homes and properties. When developers need cash fast, they’ll hold auctions to sell these properties. Public auctions are frequent, but contacting a developer and asking if they have any private auctions going on will often result in a few leads.
Real Estate Companies: Exclusive real estate may undergo a private auction right from the real estate company. What makes these auctions private is that you’ll need to be able to be cleared for the bidding process. You’ll also need to have a background check conducted to ensure that you meet all of the financial criteria to become a bidder.
We also offer real estate auctions through our private auction club called Prime Marketplace. Members can enjoy bids that start at just $1 with deals we don’t list anywhere else. Additionally, we have just introduced the Live Auction section, which is publicly open to everyone to make a high bid or bid for down payment with no hidden fees.
Benefits of Private Real Estate Auctions
Exclusivity is a rarity in today’s real estate market. Unless you’re among the ultra-wealthy, you’ll need to buy a home just like anyone else: through a realtor. And the problem is that you’ll miss 90% of the properties that you’re interested in purchasing.
You’ll also never get a chance to try and buy certain properties. Realtors often snatch up properties quickly for their own investment, and this leaves you with just the market-priced homes. You’ll still find nice properties, but you’ll miss out on deals where real estate is selling for well below the market value.
Keep in mind that a lot of the properties will need work done on them, too. And this is something to consider. A lot of real estate that goes through private auction is either extremely expensive, or the property needs some major upfront capital to bring it up to par. A home may need a new roof or mold remediation in some cases, or a home may be in perfect condition and is aiming to reach an exclusive set of buyers.
When you choose to bid through a private auction, you’ll benefit from:
Exclusive Properties: The variety of real estate offered is amplified. You’ll have access to the exclusive properties that are often never seen on the market. A lot of great properties are sitting in auction and never hit the open market.
Bulk Properties and Land: A person with a large portfolio of land will often hold a private auction to try and unload their holdings. This means you’ll be able to find several lots in the same neighborhood or bulk land opportunities you won’t find anywhere else.
Selling Property: Anyone that is interested in investing in real estate will also need to sell their properties at some point. Selling a property through a private auction will allow you to offload a piece of real estate to buyers that are willing to purchase a rundown home or bulk land – it’s perfect.
Buying real estate can come in many forms. Realtors will have you look at pristine properties that have a lot of curb appeal and come with a perfect unit on the property. But investors that want to purchase bulk land or don’t mind putting work into a fixer upper will find that they miss out on some of the best pieces of real estate because it never actually hits the market.
Private real estate auctions provide you with more options, and you’ll have a higher chance of landing real estate for below market value, allowing you to bolster your real estate portfolio for less.