There are a few common types:

• Absolute Auction—The property sells to the highest bidder, regardless of price.

• Reserve Auction—The seller sets a minimum price; if bids don’t meet it, the property doesn’t sell.

• Foreclosure Auction—Lenders or courts conduct this to recover unpaid mortgage loans.

• Online Auction—The process is entirely virtual, which offers broader access to potential buyers but requiring careful review of the property details and the terms of the auction.

Auctions may come with some risk, so keep in mind the following:

Properties sold ““as-is” means that the seller is not making any guarantees about its condition and has decided they will not make repairs even if the buyer decides to get an inspection.

During auctions, inspections are usually limited or not allowed at all. If possible, research title status, liens, and property condition beforehand. Renovation costs can sometimes be managed with the help of certain assistance programs.

Financing may be restricted: Many auctions require proof of funds or mortgage pre-approval. An earnest money deposit — a percentage of the purchase price or a set amount paid by a buyer to show their interest is legitimate — is often needed.

Expect additional costs: Bidding wars can drive prices higher than expected. Setting a clear budget — and sticking to it — is key. Winning bidders also often pay a buyer’s premium (a percentage on top of the winning bid) along with closing costs and possibly back taxes or liens.

Understand the rules: Some auctions require immediate payment, while others allow time to close. Be sure to read all auction terms carefully.