A property auction is a good place for you to check on good investment opportunities. What makes it even more interesting is the fact that it is possible for you to win a bid that costs less than the actual current market value or selling price of a property. Yes, you’ve read that right.
What makes it possible to get fixed assets at a rate lower than their actual cost lies in the purpose of the sellers or brokers putting it up for bid. When the market is immensely saturated and demands for a property decreases or when the economy is slow and limp, owners jump into other methods to negotiate a sale even if such does not create huge returns. They’ll do it to avoid losses. The same also happens for those properties that got foreclosed by banks or similar other financial institutions. They want to make the sale as fast as they can so that they can recover from the unmet obligations of their debtors and liquidate the asset. This is good news for buyers like me and you.
Unfortunately, these auctions are not exactly letter perfect. It is still possible for bidders and buyers to commit mistakes and suffer losses and/or consequences in the process. These are suffered when you commit the following faux pas or mistakes.
Failure to establish a spending limit – Before heading out to the auction, establish the maximum amount that you should spend. Never go overboard and see to it that you have such amount on hand.
Lack of property survey and research – Be aware of how certain assets are priced depending on a combination of characteristics and features. Not everyone in the auction is willing to get a low amount. It’s best to keep abreast and avoid being fooled.
Bidding without experience – Before you actually bid, see to it that you attend auctions first and observe. Learn the ropes beforehand and don’t jump out of the plane without a parachute. It’s fatal.
Relying on seller and brokers alone – As mentioned earlier, you need to research and check on the asset first before bidding for it. Sellers, brokers and owners will do their best to make a profit generating sale, the bigger the better. So if you rely on every word they say, you might find yourself at a disadvantage.
Unprepared finances and resources – Keep in mind that you cannot just bid. You must first have your finances and resources available and at the ready before you head out to any property auction.