The Complete Guide to Real Estate Auctions

Auctions can deliver the deepest discounts, but they require specialized knowledge and preparation.

Real estate auctions — both judicial foreclosure sales and online platforms — offer discounts of 20-40% below market value. But the lack of inspection access, as-is terms, and competitive bidding environment demand preparation.

Types of auctions: Trustee/sheriff sales (foreclosure auctions conducted by the county), online platforms (Auction.com, Hubzu, Xome), government auctions (HUD, VA, tax lien/deed sales), and estate auctions.

Pre-auction research: Drive by the property, research the title for liens that survive the sale, estimate ARV and repairs from exterior assessment and comparable renovated sales, and set your maximum bid based on the 70% rule with a conservative repair estimate.

Bidding strategy: Set your maximum bid before the auction and don't exceed it. Auction environments create emotional pressure to overbid. Your maximum is your maximum — period.

Post-auction requirements: Most auctions require immediate deposit (typically 5-10% of bid price) and full payment within 24-72 hours or 30 days depending on the auction type. Have your funding arranged before you bid.

Risks unique to auctions: No interior access means unknown repair costs, occupants may require eviction, title issues may exist, and there's no inspection contingency. Build these risks into your analysis by increasing your contingency buffer to 25-30%.