less looking in the windows or entering the home, is illegal and unsafe – even if you did see them do it on a house-flipping reality TV show. If you are very experienced in-home improvement matters, you might be able to get clues to the condition of the property from the street or sidewalk. If you’re not, you’ll have no clear idea what you’re taking on when you bid on a home. You Must Have Cash To Make The Purchase Most auctions have very strict rules about how you can pay for your purchase, and they almost always involve cashier’s checks or cash. You can’t finance auctioned properties. There are loans available, and we will discuss them later, but in order to bid, you’ll have to prequalify by showing that you have cash available to complete the purchase, often on the same day as the auction. That’s why most purchasers of auctioned-off properties are real estate investors. They generally have the financial backing of investors, or they have set up their businesses to allow for high cash reserves. You’ll Forego Common Protections In the vast majority of real estate transactions, home buyers are legally offered consumer protections, lenders are required to make disclosures, and real estate agents must advise you as they would advise themselves. In the auction situation, none of that applies. In addition to having little or no access to the home you wish to buy before you bid, you are responsible for doing your due diligence to make sure the title is held free and clear. Of course, the mortgage lender, and probably the taxing authority, have liens in place, but you have to make sure there are no other liens, as in the case of a home equity loan in default or unpaid homeowners’ association fees. If there are, you will be responsible for paying those liens off when you acquire the title
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