How to Buy A Home At An Auction
I have made a great deal of money by buying properties at an auction. I learned a while back about how to buy property, how to sell property, how to rent property and most importantly how to buy at an auction. Since I am a happy go-lucky kind of guy, I believe in giving back. That is why I have taken it upon myself to give you a simple step-by-step guide on how you too can make money by buying property at an auction and selling it for profit. Call me Professor Henry McCarthy – Professor of making money through real estate.
Without any further ado, here is a simple guide on how you can buy properties at an auction.
Essential tips for buying at an auction
Once you have decided that you are going to look into buying and selling property at an auction, there are some essential boxes that you must tick. These include:
- Running a thorough and comprehensive research of the area. This research should include the comparative prices and sales experienced in that area.
- Try to attend a few other auctions without actually bidding on anything. This is so that you can familiarise yourself with the whole process.
- Once you have a good read on how much houses in the area auction for as well the entire process, get your finances in order.
- At the auction, make sure that you have set a limit on how much you can use.
- Before you bid on any given property, ensure that you have done all the necessary inspections. This means that you should identify and inspect your intended bid during the research phase.
- Make sure that you have the legal end of things covered by seeking advice on any possible loopholes.
- Once you start bidding, you need to know that you should have at least 10% of the price available to act as deposit bond. This is just in case your bid succeeds.
- To log in any bids, you need to make sure that you have registered on that day. Your identification will be required.
- On the day itself, bid with confidence. Do not let others within the room intimidate you. You should know that bidding is a personal process and most people do it in a manner that is suitable for them. There are those who will be loud while there are those who will sit quietly and wait to jump in at the appropriate time. You should do so in a manner that makes you comfortable.
Should the highest bid reach the reserved price, then the property will be sold to the highest bidder. However, if the highest bid doesn’t reach this price, then the vendor may choose to withhold the property and as such, it will be passed in. In these type of cases, the vendor could then open a line of negotiations with the highest bidder to try and get to an amicable agreement. If you are the highest bidder, you will get the first right to negotiate with the vendor.
Remember, only bid up to the amount you can realistically afford. No property is a good property if you are unable to make profit out of it. Avoid overextending yourself because the higher you spend, the less likely you can make a profit out of it.
If you are able to buy a property, you will find that fixing it up some and then putting it back on the market can fetch you a handsome profit. It is a simple yet lucrative process that has the added advantage of being straightforward. Here is a nice interesting excerpt from a Rick Otton podcast about fixing and flipping homes without breaking the bank. This may be useful reference since most houses at auctions will need some refurbishing.