Buying Real Estate through an online auction on Ebay

There are many reasons people buy and sell real estate online and there are bargains to be found. But there are guidelines to follow to protect yourself and your investment. This is not a technical guide to bidding on real estate on eBay but rather a guide* to help make your purchase experience safer!

Here are a few tips!

Know what you are looking at buying. Read the listing through a couple of times.

Is the property sold "as is"? “As Is” can mean different things to different people.

Be sure you are on the same page!

Don’t be afraid to ask questions or for clarification if you don’t understand something!

What about the terms of sale? Things you need to know.

Who will provide the purchase agreement?

Is it a cash only sale?

Will the owner finance and if so what are the terms and conditions?

Will you be allowed time to obtain a new loan for the purchase?

How many days do you have to complete the sale?

Are deposits refundable if you do not obtain financing or cannot close for other reasons?

Are you allowed an inspection period so that you or a certified inspector may check the property to be sure it meets your expectations?

Will you be allowed to make the closing conditioned on your approval of the title report and the issuance of a title insurance policy by a company of your choosing?

Who will do the closing? Will it be at a bank, an attorneys office or escrow office?

What will your closing fees be?

Property condition and details:

What stays with the property?

Are the plumbing, heating and cooling in working order?

What type of electrical service is there and is it in good working order?

Does the basement or roof leak?

Are there structural defects?

Is there mold or mildew?

Has radon gas been detected?

Does the seller have any knowledge of past methanphetamine production on the property?

Are the appliances operating correctly?

If renovation or remodeling has been done, were required permits obtained?

Are there encroachments or easements or recorded restrictions?

Is there a Home Owners or Land Owners Association and what are the dues?

Will the seller put theses answers in writing or on a “ sellers disclosure“ form like the ones Realtors use? Ask him to!

Taxes, liens, and ownership:

Who is the registered owner of the property?

Are there special assessments on the property?

What are the state county and city real estate taxes?

Will the seller pay taxes to the date of closing?

Will the seller agree to make the closing of sale contingent on your obtaining Title Insurance from a reputable company?

Will the seller put theses answers in writing or on a “ sellers disclosure“ form like the ones Realtors use?

Title Insurance: 

Be sure to do a title search and buy title insraunce. The title insurance company will research the property's title and issue a preliminary title report. Look this over carefully and ask the title clerk questions. You want to insure that the property is transferred free of liens of “clouds” on the title. And you should buy title insurance. The best coverage will also provide “mechanics lien” coverage.

Additionally will need all owners to sign off at the closing of the property. Even if one spouse owned a home prior to marriage many states require that both spouses sign off on the sale.

Other things to consider: In order to protect your investment you will want to get homeowners insurance or hazard insurance. Insurance companies have their own underwriting policies. Some companies may not issue a policy where there is inadequate electrical service, a leaky roof or a history of insurance claims. Ask about insurance before buying a property. You can call insurance agents in the area to get quotes ahead of time and ask then about the insurability of the structures.

About the contract or purchase agreement:

It is always a good idea to “get it in writing”. A verbal agreement may be legally binding but it is difficult to enforce! Be certain all terms and conditions of the sale are spelled out clearly in writing. Do not sign a contact unless you understand and accept all of its terms and conditions.

Consulting a professional:

Even when buying at auction its a good idea to obtain the services of a licensed Realtor as your buyer’s agent or to hire a real estate attorney.   The fees may be less than you expect and are usually negotiable.  It may be well worth the cost!

*Please note: While this guide may be helpful it is not to be considered comprehensive or a substitue for professional advice. Real Estate laws and practice do vary from state to state.  It is recommended that you consult a professional in the area in which you are buying and that you consult an attorney where necessary.

Copyright 2006