Some of the best real estate opportunities come by way of auction. These can be mortgage foreclosure auctions, government auctions or in general online auctions like Auction.com or RealtyBid.com.
However, you must exercise care before entering into any agreements or signing anything and have your price points determined prior to game time.
Once you’ve determined your potential exit plan along with your bids, you’re ready to enter the game.
No. 1 – Start bidding right away at a live auction
House purchased at auction by RJ Palano
If it’s a live auction and you are bidding in a crowd, I suggest you establish yourself right away and bid immediately.
Don‘t wait until the last minute and jump in at the end. Let the other bidders know you are a player and if someone bids against you, immediately increase your bid or you are showing weakness. We beat our competitors often, and in some instances, they are intimidated by us. That’s fine with me, because when we send our troops to auction, we plan to win and expect success.
What used to really aggravate me was when other bidders would immediately bump my bid by $100. For example, if we bid $105,000, they would immediately bid $105,100. I’ve come to the conclusion that if this aggravated me, it would aggravate others. Thus, we now do this all the time.
We don’t blink, we don’t look at other investors for eye contact, we simply look straight at the auctioneer and increase our bid by $100 the very second the last bidder utters his bid.
I know some people like to stand back and jump in at the end. Not us. We are in-your-face serious buyers and no one should even try to bid against us because we are going to win. It doesn’t always work that way, but that is the attitude we carry into the auction. Other bidders don’t like us, but we’re not there to make friends. We are there for only one reason – and that is to make money.
No. 2 – Bid in the last 5 minutes for online auctions
House purchased by RJ Palano at auction
Online auctions can be frustrating because you have no idea who you are up against. You can’t see them or hear them, you simply know they’re there.
Your due diligence is exactly the same for these auctions, but obviously the bidding is different. In most of these, there is an automatic bid amount and your bid could increase from $500 to $5,000 with one click of the mouse.
Make sure you are registered at least one day before the auction. We always call to make sure they have us registered. The reason is that you typically have to have a down payment approved with a credit card and you don’t want to play around with this on the day of the auction.
Many times there is a reserve bid and usually you have to meet this for the sale to go through.
On these auctions, we lay back and only bid in the last 5 minutes of the auction. This is when the real buyers show up and often the auction gets extended by any bids in the last few minutes. This is the game, and this is how we play it.
House purchased by RJ Palano at auction
We have been the successful bidder in the past with online auctions only to find out that the seller had bad title. The point is – the transaction is never done until you close, so don’t count your chickens before they hatch.
In my next and final blog on this topic, I am going to show you exactly what I do and how I do it.
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