Everyone loves a steal deal, right? This is especially true when it comes to buying a condo – our first home and most likely one of the biggest investments of our life.
Thankfully, there are tons of ways in which you can snag a good bargain while buying a condo, but not all of them work as well. One such option is to look for condos for sale in Brampton that are being sold at an auction. Properties at an auction are usually listed for less than the market value, giving you a chance to score a fantastic deal.
So, can you really get a bargain while buying a condo at an auction? Let’s explore below!
What Does It Mean to Buy or Bid on a Condo at an Auction?
At an auction, a list of properties is usually presented to the potential buyers and the buyers can bid on the ones they’re interested in. An auctioneer manages the bid of these condos for sale in Brampton and is responsible for keeping the process moving smoothly. If you win the bid on a property, you’ll be required to pay a deposit instantly, with the full payment expected shortly after the auction ends.
Before you go ahead to an auction to buy your new home sweet home, you should know that there are different types of auctions and bids for properties.
Types of Auctions
- Absolute Auction – In the absolute auction process, a condo is sold to the highest bidder, irrespective of how much sale price they’re offering. This means that in these auctions, there’s no minimum amount that the seller of the property is expecting. As long as you can be the highest bidder, you get the chance to win the property.
- Minimum Bid Auctions – Unlike absolute auctions, condos for sale in Brampton that are being sold at a minimum bid auction have a set starting price. Hence, this means the property won’t be sold unless the bid reaches this minimum sale price.
- Reserve Auctions – In a reserve auction, the seller sets a price they’re willing to accept but they do not disclose this amount to bidders – quite the mystery game. So, if the bidding doesn’t reach that price, the seller has a choice to not sell their property.
Types of Bids
Now that you know about the types of auctions, let’s look at the types of bids you can make to win your dream condo.
- Open Bids – In an open bid process, all bidders or condo buyers can see how much others are offering. You can raise your bid on the condo as needed to stay in the running in an open bid.
- Blind Bids – In a blind bid, offers on condos for sale in Brampton are kept a secret from other bidders. This means you’ll have to submit a bid on a property with zero clues on what anyone else has offered.
Why Should Someone Consider Buying a Condo Through an Auction?
Buying a condo at an auction can be a “steal deal” because of these reasons –
- Potentially Lower Prices
If you’re lucky, you might be able to find a property at an auction that is priced much lower than the market value. This means you likely won’t need to stretch your budget while buying your first home.
- Quick Sales Process
Auctions usually have a set time and date for the deal which means you won’t have to wait long to move into your new home. As long as you can offer a good bid on a property, the condo could be yours in days.
- No Negotiation Hassles
In many cases, the price of a condo for sale in Brampton in an auction is set by the highest bidder (absolute auction). This means you won’t have to deal with the back-and-forth negotiations which is usually common in Brampton’s hot housing market.
- Unique Properties
Auctions often feature distressed condos, foreclosures, and unique or historical condos that are usually not available through traditional property listing platforms. So, at an auction, you get a chance to explore these unique properties.
A FAIR WARNING – You Might Not Always Get a Bargain on a Property at an Auction
No doubt, at auctions, you can find low-priced or unique condos for sale in Brampton and can grab them without much haggling. However, buying a property at an auction also comes with a host of potential downsides such as –
- Limited or No Inspection Time
Often, you won’t have the same level of inspection access for a property at an auction as you would with a traditional home for sale. So, basically, you’ll be buying the condo blind at an auction.
- As-Is Condition
Auctioned condos are typically sold as is, meaning you’ll have to buy the property in its current condition regardless of any defects or problems.
Doesn’t this make the above “no-inspection” point sound like a deal-breaking factor? Totally!
- No Contingencies
Auctioned condos for sale in Brampton typically do not allow for contingencies like financing or home inspections. This means that once you win the bid, you’re committed to buying the property, no matter what hurdles you come across after the auction.
- Bidding Wars
Auctions for properties can get really competitive and it’s easy for you to get caught up in the excitement. Hence, you might end up bidding for a condo more than you can afford because of the whole competitive vibe.
- Immediate Payments Required
When you win a property at an auction, you usually need to make a deposit right away, often within 24 hours. The full payment for the condo for sale in Brampton will need to be done shortly after.
- Hidden Costs
Auctioned properties often come with a pile of hidden costs such as repair expenses, outstanding liens, or unpaid property taxes. These hidden costs can quickly erode the savings you made from the lower purchase price.
- Eviction Challenges
If the auction property is currently occupied, you may face a lot of problems in evicting the occupants. And let’s admit it, moving into your first home by forcing and dragging someone else out when you, in fact, have paid for the house can be a not-so-pleasant experience.
Buying a Property at Auction Might Actually Be a Gamble
Looking at the cons above, it’s clear that buying a condo for sale in Brampton at auction comes with more risks than rewards. Sure you may get a chance to grab your first home at a much lower price but there are too many unknowns in this process. You never know if you might end up with a condo that has a lot of repair issues, unpaid taxes, or legal issues by buying it at an auction.
So, instead of taking this risky route, it’s better to work with an expert Realtor and buy a condo in the traditional way. A Realtor can help you find and buy the perfect condo that fits your budget and needs with their knowledge and expertise. This way, you’ll also have more time to make home-buying decisions and have the chance to inspect the condo before making an offer. So, why gamble when you can work with a Realtor who can help you get a good bargain while buying a condo in the traditional way?
