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How to Purchase A Bainbridge Rental Property at Auction

A Man with a Gavel and Model HouseSimilar to numerous Bainbridge rental property investors, your exploration for an excellent bargain may have you considering buying real estate at an auction. But there are multiple things you need to comprehend before your first auction. Buying income properties at auction is far riskier than acquiring them in other forms. Although possessing good information and a strategy can help reduce some of that risk, real estate auctions will never be right for the faint-hearted – or risk-averse – investor. Those comfortable with some risk keep reading to figure out the basics of successfully buying a rental home at auction.

Risks and Benefits

The first thing to keep in mind when buying an income property at auction is that there are both risks and costs and benefits to consider. While houses sold at auction may appear to be priced below market value, many of them are in poor condition or have serious issues that will require extensive repairs. You may not be able to inspect the property before you buy, so this is one risk that may be difficult to interfere with. Other risks of buying at auction include the potential to overbid in the heat of the moment as well as the possibility of delays after purchase as the property goes through several entities, state or country redemption periods, and more.

On the other hand, auctions are a good way to discover real bargains on rental real estate. When you get a property at a big discount, you will maximize not only your cash flows but also your total return on your investment. Another strength is its ability to take possession of the property within a short time. Mostly, auctions can transfer the title on a property within 30 days, allowing you to begin preparations for your first tenant immediately. That means your property could start generating rental income much faster than a traditional sale.

How It Works

The process of buying a property at an auction begins by finding real estate auctions. This can be done by searching online auction websites or databases or working with a real estate agent specializing in auctions. Once you locate a potential property, your next target is to find out as much as you can about the property. Make sure to do a thorough comparative market analysis and evaluate the property’s potential as a rental home. Preferably, walkthrough or arrange an inspection of the property. If that is not feasible (and often it is not), you could drive by and peek in the windows. In your research, you should do your research. Take a closer look if there are any occupants, liens, or other possible concerns that may create roadblocks to ownership.

To bid competitively at an auction, you need to have plenty of cash on hand as well as financing lined up before you start to bid. In most cases, to buy a property at auction, you will need at least 10% of the selling price for a deposit, the ability to pay the remaining balance immediately (or within a matter of days, in some instances), and cash for administrative fees, survey costs, and insurance. Aside from that, there are different types of auctions, so be sure to thoroughly review all of the auction rules and be prepared to follow them.

What to Expect

Before you can bid in a real estate auction, you will have to register and submit a refundable deposit of 5% to 10% of the property’s expected selling price. If the auction is in person, plan to come about an hour before the auction starts to check in and get your official bidding card, which you will use when you bid. If the auction is online, you’ll log in to the auction website to make your bid. After the bidding begins, you will need to figure out exactly how much you can offer before the property is no longer a bargain. If you can avoid a bidding war, the chances of paying too much will greatly be reduced.

The result of whether you’ve won your auction or not will arrive within a minute. If you don’t win, you will get a refund of your deposit. However, if you win, you may be required to pay for the property in full immediately after the sale. Some auctions encourage you to bring cash or money order with you to complete your payment right away. Others will give you until the next day, or perhaps several days, to submit the required funds. Failure to do so will result in losing the sale, forfeiting your deposit, and even being banned from participating in future auctions, so it’s imperative to complete payment as requested. Then, even though you won the property at auction, you will still go through escrow and closing, just as you would when buying any other property.


Growing your investment portfolio – through auctions or any other means – can be a challenging but fulfilling endeavor. Real Property Management Valor Team offers free market rent evaluations, and we’re willing to give you advice on any potential properties you’re considering purchasing. You can contact us online or call at 440-534-6700.

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