Property auctions pertain to a type of accelerated marketing and public open cry bidding process that trade real estate assets in a competitive and fast-paced platform. It’s a great venue for both sellers and investors but also one that comes with risks. They necessitate a lot of grit and careful strategy and not to mention enough courage. These things are no doubt not for the faint hearted.
But even so, they attract a wide range of market. Not surprising as it comes with its numerous perks. If you want to win at property auctions then you must, by all means, avoid the following deadly sins.
1. Excessive Bidding – Always set a spending limit otherwise you’ll burn a hole through your bank account. That or suffer the shame of a winning bid you can’t stand up for.
2. Lack of Understanding – Before stepping into the playing field, make sure that you’ve got your arsenal ready and strong. This means having done adequate research and reading through the procedures and requirements of the auction.
3. Zero Research – A newsletter, brochure or site list shall be provided days prior to the event. Make it a point to read through it and carefully shortlist properties that fit your needs and budget. Don’t hesitate to look them up.
4. Survey Absence – Pay the asset a visit, at least the ones you’ve shortlisted and are willing to bid for. Have them surveyed too so you’d know that you’re getting value for your money.
5. Being Too Transparent – Never divulge information both to sellers and co-bidders. They can use that against you which will trample your game play. Of course, nobody wants that so keep those cards as close to your chest as possible.
6. Emotion over Logic – Always know the reasons behind the purchase. Why are you getting that asset and for what? Don’t let emotions ride over those needs or you’ll end up regretting an impulse buy.
7. Inadequate or Improperly Timed Resources – Property auctions have very tight payment timelines and one has to be financially ready in order to commit and participate. For instance, an upfront down payment in cash which can reach at least 10% of the total winning bid will be required with the remaining balance to be paid over the course of the next 28 days. If you want your bid honored, make sure to arrange financing ahead of time.