Real estate auctions are everywhere these days. And with more and more properties being offered at auction, it is imperative that you know the ropes before venturing into the realm of competitive bidding. Here are some interesting facts about real estate auction:
1) Not all auctions are due to distress situations. As a matter of fact, the best auction properties are just the opposite. The properties that do well at auctions are the ones that everyone wants ... the lake lot on the point, the corner commercial lot in the busy area, the mountain house with the 360 degree view. These, properly advertised, can often pull more than market.
2) Not all properties sold at auction on the courthouse steps are lien free. Many property's have liens, such as federal tax liens which may force you to hold the property for up to 90 days until the tax issues are resolved.
3) Most properties can be purchased prior to auction. The reason you would want to do this is simple: TERMS. You can negotiate all terms prior to an auction, but the auction itself is bound by the terms and conditions of the auction. If you need special considerations, try to make your best deal up-front.
4) Very few real estate auctions are absolute. Most have a reserve and are sold subject to seller's confirmation. If you are planning to low-ball, be aware of what kind of auction it is and you will avoid a lot of wated time.
5) The auctioneer is in charge. He or she may pause, wait, encourage, suggest or do anything else to encourage more bidding. I once paused during an auction to give a bidder a moment to "think about it." The person with the current high bid was enraged, saying I had to proceed with the call. Sorry, I work for the seller, not the buyer, and it is MY OBLIGATION to get the highest bid possible.
I'll be posting more auction tips in the future, so please subscribe to my Blog!