Real estate auctions provide an ever-changing inventory and offer some awesome prices. But, here's the thing: when you find a good buy, you have to be ready to pounce. Auction house rules are pretty strict; basically, if you don't have enough cash for the down payment -- usually 10 to 20 percent of the winning amount due on-the-spot or within 24 hours -- your bid gets rejected. So, to keep from wasting your time, take enough cash to the auction to seal the deal if you win the bid.
Borrow from Family
After you and your spouse have crunched the numbers and you still need cash for an auction down payment, consider borrowing the amount you need from a close family members. Approach loved ones who have a vested interest in your success, such as parents or grandparents, for a loan. Unless your relative explicitly states that the money they give you is a gift, set up a formal repayment plan and pay the loan on time to avoid taking advantage of your family members' good graces.
Take Out a Loan
Consider taking cash advances from your credit cards to come up with enough for the down payment. This could work out if you plan to bid on a low-priced property (for instance, a condo listed at $20,000). With cash advances, however, you will pay service fees and you'll need a proactive repayment plan to avoid high interest rates. If you need cash for a higher-priced auction property, consider applying for a low-interest signature loan from your bank. You don't need collateral to qualify for these personal loans, but you and your spouse must have an A-list credit rating to qualify.
Sell Something Valuable
Selling collectables or valuable items sitting around collecting dust can earn you some quick cash. For example, if you gold jewelry stashed in a drawer that you haven't worn in decades, you can sell it to a pawn shop. You can also raise cash for the auction by selling good-quality vinyl records, vintage appliances in good working order and sports memorabilia.
Avoid getting emotional about a property. If the bidding exceeds the amount of cash you have on hand, you might have to walk away. Additionally, if you plan to finance the purchase with a mortgage, it is vitally important to get loan approval before you ever place a bid. Without loan approval, if you bid, win and make your deposit, you could lose your cash down payment if you fail to close on the property.