If your finances have seen better days and you’re thinking about selling your home quickly, you might be tempted to put it up for auction rather than putting it up for sale.
Like anything else, there are both pros and cons to the idea of selling your house at auction.
Here’s a simple breakdown of those pros and cons to help you make the best possible decision.
When You Auction Your Home, Buyers Pay in Cash
Most home auctions don’t allow for traditional financing. Bidders who attend the auction are expected to have the money ready before they can participate.
This is good news for you because, after the auction, you’ll receive payment much faster than you would if you had to wait for the buyer to receive financing.
No Bank, No Fuss
One of the most significant advantages of selling your home via auction rather than taking the traditional route is you won’t have to meet the high standards banks demand.
For example, when auctioning a home, you won’t have to let the bidders inside, nor will you have to satisfy a home inspector.
The bidders take on a substantial amount of risk as they typically have no idea what the home looks like on the inside when placing bids.
However, keep in mind that you, as the seller, are also taking on a rather considerable amount of risk, which leads us to our next point.
You Might Not Get the Amount You Hoped For
The single biggest risk in a home auction from a seller’s perspective is the possibility of not getting the amount of money you are hoping for.
Sometimes it’s not a matter of hope or preference. Sometimes it’s a matter of necessity. After all, most people who consider auctioning a home are between a rock and a hard place financially.
Consider this scenario to put things in perspective. Say you need to sell your house for at least $100,000 to pay off all your debts.
What happens if the highest bid is only $75,000?
Although you can set a minimum amount for the lowest offer you would be willing to accept, there’s no guarantee someone will bid that high.
You will have the right to refuse any offers should they not meet your minimum.
Another thing you should keep in mind is that it costs money to sell a house at an auction.