Why do homes go to auction

house on sale

While in a recent article we discussed why do homes get foreclosed, now we are here to discuss some reasons for why homes go to auction and just to remind you, foreclosure is one of them. However, a house on auction doesn’t always mean the owner is losing the control. It might also be the part of a marketing strategy. Nevertheless, there are two types of auctions. If you are standing at an auction at the courthouse steps, it’s a foreclosure which means the owner is losing the home. On the other hand, if you are standing in the yard or inside the house for an auction, it’s just the sales technique to obtain a handsome price from the auction.

Following are some of the potential reasons for a house to go on auction:


One of the most potential reasons for a home to go on auction is foreclosure. This happens when the owner is  unable to pay mortgage due to the poor state of the economy, job loss, death of the breadwinner in the family, illness, unexpected maintenance costs, sometimes even due to divorce or relocation of the job.

The death of sole owner

In this case, if the owner of the house has died and there is no one to pay the debt, the executor is usually directed to dispose the property as soon as possible, again, to recover the remaining debt. In such cases, there is usually a reserve price that has to be met before the house sells. If it doesn’t, the house goes to the market for auction

Unpaid taxes

If the owner hasn’t paid the taxes in the years, the city takes the possession of the house and puts it on auction to recoup the taxes owned on it. In this case, the house goes to the highest bidder, no matter whatever the price is.

Sales technique

The house on auction might not always be due to any of the reasons mentioned above. However, it might also be a marketing strategy to obtain (so the owner expects) a better price for the house. Sometimes, the owner puts the house on sale to avoid the foreclosure. This helps them sell their home quickly and with comparatively less hassle and stress.