Experts say that there are several benefits of purchasing properties from auctions, some of these key benefits have to do with the price, not to mention the speed of the sale, and finally, the fact that many of the real estate buys happening at auctions are already established, in terms of renter occupied properties, which translate into fast money.
Rather than buying a vacant property, why not buy one that is already yielding a return over the average market rate, as opposed to buying a new property, that would be just starting out as an investment property.
One great tip for the first time auction shopper, is to make oneself informed about the guide price, and what it actually means. According to experts, the price displayed in a guide is a way to estimate what the property was worth on the date that the price was published, and it should give an idea of where the auction might start at. (info source: real ingenious sdn bhd web)
With that said, in reality, expect for the property to sell above that price listing. For instance, if the lot is very attractive, chances are that the original rate will increase above and beyond the beginning reserve price. So, keeping this in mind can help buyers from running into disappointment later on down the line.
With respect to legal information, buyers should always do diligent research. In order to do this, prospective buyers must pay attention to the details in the legal packet, that accompany the auction guide. Although many properties can be on the up and up, there are many properties up for auction that have several pending legal attachments, liens, or other legal situations pending, definitely things that should be inquired about prior to making any offers.
Overall, buyers must be sure to clarify that the legal packet is in order, because once the gavel comes down, the property is deemed to the buyer, with all legalities of the newly purchased property.
In the auction world, there are several myths surrounded repossessed homes. According to experts, there is currently a long term average of only around 10 percent of property repos that end up in the auction room.
Long time professionals say that many people are led to believe that the repos are not worth the buy, however, there is much debate on the subject, and when it comes down to it, this is something people have to decide on for themselves.
Finally, using specific tips and tactics can keep buyers on track, and this requires sticking to the financial reserve that was originally designed. If funds are limited, standing at the back of the room can work to one’s advantage, since anyone bidding from the back has the chance to see who is bidding, and how they are communicating, whether they are looking to continue increasing their bids, or perhaps if they are shaking their heads no, which would translate to the effect that they do not intend to make any additional bids.
Also, if the auctioneer starts off asking for a specific amount, it’s always a good idea to start a counter offer out at a lower amount, perhaps around 10 percent lower than the asking price for starting bids.