Property auctions are a great avenue by which to score great investment opportunities. They are high intensity and competitive public sales that involve aggressive bidding but despite its seemingly intimidating concept, it has allowed many investors to acquire assets at amazing deals with some at a price lower than the asset’s current market value. But because it deals with a lot of external factors, any investors must be well prepared before even participating in one. Part of such preparation is knowing what it is to avoid and what not to do during property auctions. That said, the following list might be of interest.
- Bidding Without Doing Your Homework
Before you bid, see to it that you attend a few auctions first just to observe. Learn the ropes beforehand and don’t jump out of the plane without a parachute. It’s fatal. In connection, make sure to understand and be well aware of the processes and requirements that go in property auctions. You have to prepare yourself by reading up and gaining knowledge. Get to know the seller and auctioneers. Check out and understand the terms, policies and procedures.
- Failure to Establish a Maximum Spending Limit
Before heading out to the auction, establish the maximum amount that you should spend. Don’t feel overwhelmed and bid on sheer abandon of logic. You’ll lose by default. Before stepping into the field, see to it that you have assessed your capabilities and set a spending limit. Never go overboard and see to it that you have such amount on hand.
- Lack of Property Validation and Survey
After receiving the newsletter or brochure, run a check and create a shortlist of assets that fit your criteria. Learn about everything you can on these properties. Have it surveyed by a professional. Pay it a visit yourself. It is also important to keep abreast as to how similar assets are currently valued in the market. This should help establish not only your maximum bid amount but also whether or not a certain asset is worthwhile.
- 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 or risk having to scratch your head in defeat. Prepare your finances beforehand and make sure that they come ready on time for the property auctions. We all know how long it takes to pool resources.
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