With rising market prices and competitive property listings, purchasing a home at a residential auction can be a smart move for first-time buyers. But before you attend an event or bid on a house, here are seven things that you should know about the real estate auction process.

1. Decide Which Type of Auction to Attend

Before attending an auction, you’ll need to figure out which type of real estate auction is best for you: a foreclosure, a tax lien, or a trustee. While each of these types of auctions is similar, their differences can significantly impact the price. Foreclosure auctions start at the amount of money that is still owed on the property loan. A tax lien will begin at the balance due to the tax authority. And a trustee auction can range from loan balances to market value for the starting price of a house.

2. Learn the Auction Requirements

Depending on the type of auction being held or the company hosting the event, you may be required to place a down payment on a property before bidding. This is a “good faith” action that shows the auction company that you’re sincerely interested in purchasing the home if you have the winning bid. And to avoid any miscommunication or confusion at an event, make sure to research the terms of the sale and the down payment requirements beforehand so that there are no surprises.

3. Do Your Homework

Along with researching the terms of sale, take some time to learn about the area where the property is located before attending its auction. Be sure to also look at other property values, the condition of the area, and local schools and businesses as well. And since auctions are announced 30-90 days before the actual sale date, you’ll have plenty of time to base your bid price according to the information that you gather.

4. Have Financing in Place

While some auction companies allow you 30-45 days to secure funding and pay the balance of a home, there are many companies and government entities that require payment in full within a 7-10 days time. To secure a home that you successfully win at an auction, it’s always best to have funding or financing in place. This can also allow you to know exactly how high you can bid at an auction without going over your budget.

5. Survey the Property

In most cases, properties at auctions are offered ‘as-is,’ meaning that any repairs, flaws, or defects are the responsibility of the new owner. Additionally, those who purchase the property can be required to bring the house up to code. To avoid any unwelcome surprises when buying a home, be sure to survey the property that you want to bid on and take into account the amount of money involved in making any necessary repairs

6. Don’t Forget Additional Fees

In addition to the final auction price, there can be extra costs involved with transferring and securing a property title, including taxes and auction fees. Be sure to keep these additional costs in mind before you bid on a house so that you can easily cover these expenses once you purchase the property.

7. Try a Practice Run

Before actively participating in an auction, try attending a few to see how the process works. Many of these events move at a rapid pace, and knowing what to expect can help you to bid and make a purchase on a property with confidence.

Thanks to our friends at Cheap Movers Kansas City (website | twitter) for putting this helpful list of residential auction tips together. If you’re in the market for affordable movers in the greater Kansas City area, give this company a call. They are KC’s low price leader for quality moving services and can help you get swiftly moved into your new home, whether it’s one you purchased through an auction or just off the MLS.