OfflineStealing a deal at regional public auctions
1. Timing. When several bidders are jockeying for a property, wait until the bids start to die down before making yours. There's no sense fueling the fire.
2. First dibs. The first few properties offered often sell for less because most bidders are trying to get a feel for pricing patterns before jumping into the fray.
3. Dress (and act) the part. Some buyers like to dress like bankers and arrive early to position themselves near the auctioneer. That's so other bidders will assume they're representing the lender and possibly shrink back from a bidding war.
4. Research multiple homes. Don't miss those open houses; they typically run from one to three days. "Do your homework on a lot of properties," Friedman says. "Try to come to auction in love with 10 properties instead of just one." Bring detailed information and photos of each house you're interested in to avoid confusion.
5. The pro knows. Bring a veteran rehab contractor with you to the open houses to estimate repair costs. That will keep you from overlooking hard-to-spot damage and flaws and give you a more accurate picture of what you're buying. Pay special attention to plumbing and mechanical systems.
6. Research the market. Find out the recent — in these troubled times, no more than the past three months — selling prices on neighboring homes. Real-estate agents will often try to win your business by providing these "comps," which show what comparable homes in the neighborhood are selling for. To be realistic, the comp prices should factor in all auction-bought and short-sale homes in addition to standard multiple listing service sales.
Trustee auctions
Sean O'Toole has purchased upward of 150 investment homes at courthouse auctions, or trustee auctions. They aren't for the fainthearted, he says.
"These take a more sophisticated effort (than the larger auctions)," says O'Toole, founder and chief executive of ForeclosureRadar.com, a foreclosure service for real-estate professionals. "They are a different animal. Five guys standing around a courthouse with a million dollars in checks in their pockets -- that can be bizarre and a little intimidating."
The "notice of trustee sale," sometimes called a "sheriff's sale," will be published in a newspaper of record once a week for at least three weeks prior to the sale date. You need to do your homework before attending. smclindon
This is all great advice. I would like to add my voice on a couple of points I feel strongly about.
The way you act and position yourself is huge at an auction. I have been to many auctions where the only people around are in jeans, t-shirts, flannel shirts and look like they have just stepped away from painting or yard work to come the auction. If you dress like an investor and act like one, you will find that people will not only talk to you a little more friendly, but you will be seen as a real player. In addition, pay attention to the fever that goes on at auctions. Like Randy said, don’t add fuel to a bidding fire. Watch and learn, then if appropriate make your offer.