Investors – Considering Public Auctions?


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Investors on the prowl for deals, frequently wind up at public auctions in the hope of buying properties at discounts. Contrary to popular perceptions, buying at auctions doesn’t usually mean buying inexpensively. Auctions aren’t always teaming with discounted properties up for the pickings as so many tend to assume. Many houses that go on sale at auctions don’t have much equity in them and when they do, a crowd usually shows up. Without doing enough research about the properties they are bidding for, property purchased at an auction may turn out to be a cash sinkhole and not a cash generator as an investor might have hoped. That said, it is still possible to find great discounted properties at auctions which can potentially yield an investor handsome profits.

Even before going to the auction, a wise investor should do some research about the property they plan to bid on. They need to at the very least, drive to the property’s location to check it out for themselves and if possible ask for a showing. By physically checking out the property, they will have a better idea of any fix up costs. They should also carry out an independent appraisal to determine the house’s market value, especially if they plan to flip it. They should then make up their mind about the maximum bid they will be willing to offer. A title check should be carried out to make sure the title is lien free and that the seller or a trust representing the property is the legal titleholder.

On the actual day of the auction, an investor should arrive well on time, and be present at the auction venue before the auction is scheduled to start. Auctions don’t take a great deal of time,some last just a matter of minutes. An investor should show up with adequate certified funds, enough to pay the required payment, if they happen to win the bid. In some jurisdictions, only a certain percentage of the winning bid has to be paid on the spot, in others, the whole amount may be required. Once the bidding starts, it is important for an investor to relax and avoid engaging in a bidding war or end up bidding higher than the maximum they planned on paying.

Buying at auctions should never be regarded as the sole source of an investor’s purchases for the reasons we have just examined. This doesn’t mean that they should be avoided altogether. With good homework and due diligence, it is possible to find deals at auctions just like anywhere else. Auctions should remain an integral part of an investor’s sources of finding new deals.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

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