Property auctions might sound like the perfect place to purchase your dream home cheaply. The problem is that you need a strategy to become the winning bidder. Too many people have seen their dream home sold to another bidder at the property auctions because they were inexperienced. The best way to get real-time experience at bidding at a property auction is to go and view one to see how they work.
Even if you have read every single piece of literature on financing your purchase, and you are determined not to spend too much, you might find the auction house to be a little less friendly than you imagined. In essence, a three way fight is going on at the property auctions. First, you are there, the investor, or the prospective home owner. Second, there is the auctioneer, who is not only trying to secure the best deal for the seller, but also for his auction house. They receive a percentage of the final selling price. Third, there are the competitive bidders who want to psych you out of your perfect investment, or dream house.
Here are some hints, tips, and survival strategies for dealing with a hostile property auction environment.
1. Be seen
Try to position yourself in a way that the auctioneer can see you making your bid. If you are standing behind the world’s tallest man, your bid may not be seen or counted. There is no need to go crazy with this at the property auctions; you do not need flashing lights or a ridiculous hat. However, when you bid, fully extend your arm. There are usually many other bidders at property auctions, which make the job of the auctioneer difficult.
2. Find an agent
By using an agent at property auctions, you will not have the trauma of doing the bidding by yourself. The agent will take instructions on your highest bid from you, and then bid at the property auction on your behalf. Agents are great because they do not overspend, but on the other hand, they cannot push your bid up either.
3. Bid on the internet
If you do not trust yourself at property auctions, or do not like the idea of a hostile environment, the auctioneer can add your internet bid to the live bid. You can’t see who you are bidding against, but your identity will be protected this way.
4. Jump!
A jumper at a property auction is someone who waits till the last moment to bid. This can psych out the competition and make you a winner at the property auction.
5. Look for phantom bids
An auctioneer will sometimes act like he is receiving bids at property auctions, but there actually are none. The auctioneer can only do this up to the reserve price, and the purpose is to generate interest in a specific property auction. If you can see phantom bids, there probably is no interest – you are then on your way to a bargain!
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