When someone can’t make the payments on a loan or mortgage then the lender – often a bank – has to be able to get back the money they’ve lost somehow. Often this is accomplished by repossessing the home or car to sell at an auction. For banks it’s more important to get the majority of their money back quickly than it is to wait months to get the best price which is why you can often get discounts at bank repo auctions.

The exact price of the house depends on a number of different factors including who is at the auction and where the auction is held. You need to be willing to pull out of the bidding if it gets to a certain level because the competitiveness of the bidding is often down to luck and it’s hard to tell what it’s going to like beforehand. Set a strict upper ceiling to you bidding that you won’t cross no matter what so you can avoid the problems that go along with overbidding.

There are some things to keep in mind if you’re buying from an auction though. First of all, if you have the highest bid and that hammer comes down then you’ll have to pay the deposit on the item – often 10% when it comes to houses – immediately. Because of this you need to be sure you have the funds available. Also, unlike buying a house from an estate agent  at an auction once you’ve won you can be certain that the house is yours and won’t be open to better bids.

As you don’t get a second chance when you’re buying bank repo homes from an auction it’s important that you thoroughly inspect the house before making the decision to bid on it.  The same goes for any other items such as bank repo cars and boats.  You definitely don’t want to be faced with any unexpected surprised when you move in!