Buying a home at auction can be very tempting. Anyone who wants to buy a home can be attracted to the possibility of buying a good property below market value. In times like these, when excess property inventory is a challenge for the banking industry, auctions have become an important tool in the real estate market.
Auctions have become a great alternative both for people who are looking for their main property and for those who have turned it into a part-time job, buying repossessed properties to invest, remodel, sell or rent. This is a good way to get a home for a lower price than the market price. In many cases, these discounts amount to between 30% and 60%.
Also, the auction becomes a good alternative when banks have been with repossessed properties for a long time and need to get out of them to regain liquidity in their assets. This method of sale has proven to be very effective when the seller is urgent to leave the property and has not been able to dispose of it through traditional sales mechanisms.
One of the most used alternatives auctions. This means that the auction begins and the interested persons begin to bid, indicating to the auctioneer the price for which they are willing to obtain the property At the auction there are people around you bidding for the same property but for a different purpose. Each one goes with a different budget and with an idea in mind of how much they are willing or have the economic capacity to acquire it.
In the auction, the fair price in the market is reached in an open forum, where in fair competition, a universe of buyers and sellers are combined in search of the exchange of the best goods.
Here are four simple steps to take in order to compete as equals and make the most of the opportunity at auctions:
Step 1: Thoroughly review the auction information catalog.
This is essential. By reviewing the auction catalog, you will know the conditions of sale established by the auctioneer and the basic information of the properties to make a preliminary selection. It is important that you are clear about the terms and conditions that govern it.
Step 2: Inspect the property at the auction
This is the most important aspect since this is the moment in which the theoretical selection that you have made, as a result of the study of the catalog, will be consolidated or changed. Make a choice of the properties of your preference, take into account location, comparables, and your budget. Try to focus on the selected goods and do your research on everything related to it. This information will help you make a good decision.
Step 3: How much can you afford a property at the auction?
Once you have inspected the property, you will be able to decide the price, if it is not clear it is time to consult experts on the subject. If you are applying for financing, obtain a pre-qualification from a banking institution of your choice before the auction. It should offer you and indicate how much you could qualify for.
Step 4: Attend the auction
This dynamic consists in that the bidders who attend, present their bets, know the offers of the other bidders and can increase or improve theirs. Try to stick to the pre-set prices or for which you qualify. Arrive early, bet up to the preset amount, try to adjust as much as possible to this amount, since during the auction it is possible that due to the excitement and speed you may be tempted to pay more than expected.
In every auction the protagonist is you, so do not be afraid to act as naturally, feel comfortable, without pressure, enjoy the event and share this gratifying experience of acquiring the best property that you like at the best price, the one that you like it too.