nce you have found a property that you would like to buy you need to think about how you’re going to go about actually acquiring it. Depending on how the property is listed you will need to bid at an auction or put a written offer into the real estate agent.
Let’s have a look at some tips on ‘how to buy a house at auction’.
Before you even think about trying to buy a house at auction it is vital that you have witnessed several other auctions take place. I would recommend dedicating one Saturday to simply go to as many auctions as you can. Go to realestate and search for upcoming actions around your desired area. Then plan out your days schedule. In most areas you should be able to see at least 3-7 in one day. This shouldn’t be a chore or a hassle, believe me there is nothing more entertaining than an auction (I’m surprised there isn’t a reality TV show about it yet). It has all the ingredients of great entertainment – suspense, excitement, joy and sadness, be careful because you might actually become addicted to going to them!
In all seriousness it is very important to see how they work because when it comes to your turn you want to at least believe that you know what’s going on. When I go to an auction I always like to pretend that I’m going to buy the house. I will give myself a realistic budget and then whilst the auction is going try to imagine when I would make my first bid and see if I couldn’t have won the property. If you’re good at using your imagination a I would highly recommend using this strategy as it allows you to feel a little nervous and get an idea of how tense you will be when the real thing comes along. Just make sure you don’t ACTUALLY make a bid – that could be quite embarrassing!
Another thing to study when ‘auction watching’ is to see who ends up winning and how they went about it. When there is a competitive auction with a number of bidders the winner nearly always leaves their run to the last minute, or they might do something unusual like raise the bid by $5,000 when everyone else is only raising by $1,000. A good bidder will give the IMPRESSION that they will pay ANYTHING for the property but when the price goes over their budget they will simply walk away. Bidding at actions is a very stressful job and If you feel like it would stress you out too much then I would recommend finding somebody who has some experience and getting them to bid on your behalf.
The other way you might buy a property is by putting in a written offer. This has its advantages and disadvantages. You will generally have more time to think about how much you’re prepared to offer – but this is not always a good thing. Remember not to fall in love with a place, think about the numbers and settle on a price that you would be very happy to buy the place at. How high you’re offer is will depend greatly on how many of people are interested in the property. The real estate institute and agent will always tell you that there are ‘lots’ of interested buyers but it is generally pretty easy to get a realistic idea of how many people you are competing against. If there is very little interest then you can obviously start low and try to portray the idea that ‘If I was to buy the property at this price I would be happy otherwise it’s not exactly what I’m looking for’. If there really are other interested buyers then it’s important to think about what you offer. It needs to be high enough that they will take you serious and will keep you updated as to other offers. Always remember to keep your bid to a level that you would be delighted to buy the property at. It is also important to take a look at the property’s depreciation report before purchasing it, because the last thing you want is to get a call from the Real Estate agent saying congratulations and think to yourself ‘oh dear, did I really want to pay that much for the property’.