Property Auctions Part Two - Numbers vs. Emotions - Your Guide to Staying in Control
Property auctions are a fantastic way to get a great bargain on a home or a rental property. However, they can also be tremendously overwhelming. There's a lot of information, a lot of excitement, and a fair amount of pressure to get the winning bid. All of this commotion and chaos can send logic right out the door.
It's important to reign in your emotions, as fun as the roller coaster may be, and make buying and bidding decisions based on the numbers and logic. Here's how to keep things in check at your next property auction.
#1. Before you ever consider attending a property auction, know your goals and what you're looking for. Are you looking for a property to rent? A property to fix up and resell? Are you looking for a property to live in? How long will you own the property? And perhaps most importantly, how much do you have to spend? If you're looking to buy a rental property, how much do you want to make on the investment?
#2. Know how much you can spend, write it down on a piece of paper and take the number with you. You may want to write down two or three numbers. How much you'd ideally want to spend and how much you can spend and still meet your financial and investment goals. Knowing these numbers will help you bid accordingly. Take the paper with you and pull it out before you're getting ready to bid as a reminder.
#3. Research the properties before you attend an auction. Make a note of the properties that fit your goals. Research them to find out how they fit into your financial and investment goals. Come up with a top limit of what you'd be willing to spend on each property and commit to sticking to your budget.
Make sure you research the property values around the homes, the neighborhood features, the schools, the taxes and also the condition of the home.
#4. Make sure all your funding arrangements are made before you attend the auction. This will help you bid with confidence.
Be prepared to walk away. No deal is better than a bad deal or an investment you really cannot afford or doesn't meet your needs. An auction is an exciting process, however, it's important to look at it like a tool not a competition. If you view it as a tool to get what you want, then you'll walk into the auction confident and prepared. When its time to flip the home, contact your real estate broker to assist in the selling process.