You have surely seen the scene on TV – people frantically shouting out numbers before finally all but one person remains and a person slams that hammer down and declares – SOLD! There are very few things as fun as an auction and the possibilities of great deals are priceless. While auctions and real estate seemed to go hand in hand very rarely, real estate auctions have become more and more popular. Real estate auctions work in generally the same way auctions do. They usually revolve around property that have foreclosed. This can be seen in the auction process used to sell HUD homes. However, there are some instances where a house for sale by owner will do a mini auction to sell their home. This instance is a bit rare though. One of the great benefits of a real estate auction is the possibility of making a great real estate investment for a very low price. After all, real estate auctions work like other auctions – there is a starting price and then people compete by putting in bids with a higher value. If you are fortunate, you may be able to buy a great home for sale for a very low price. However, there is always the possibility that a bidding war would ensue and the house would be sold for a price higher than its value. This is the scenario that benefits the home seller. With these big stakes, it is easy to see that real estate auctions may not be the most practical way to buy a home for sale, but it is arguably the most fun. As previously mentioned, real estate auctins tend to involve homes in which the owner lost the home due to foreclosure. However, with the rise of the Internet, real estate agents are seeing a rise in popularity of the real estate auction online. While this can be due to the popularity of E-bay’s auctioning system, real estate auctions are just another way that the Internet has opened up the real estate market. Real estate auctions have a number of advantages and disadvantages. They are a fun way to judge market values of homes and will benefit you if the real estate market conditions in your area favor the buyer. This is otherwise known as a seller’s market. However, there are some precautions one must have when participating in a real estate auction. First of all, you must make sure that you take the proper precautions before bidding. This entails thoroughly looking at the home for sale. While auctions are fun, they can be dangerous. Many real estate agents tell stories of people who bought a home for sale through a real estate auction while caught up in auction fever. By being smart, you can take advantage of real estate auctions.