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How To Avoid Bidding Wars At Real Estate Auctions

Tuesday, February 27th, 2018
bidding strategies

Many people that go to real estate auctions are looking for a lifelong home, while others are looking for houses to remodel and flip. Buying a home at this type of auction is a great way to save money if you bid correctly and avoid a bidding war. However, many people will start a bidding war in order to make other bidders pay more and help themselves get ahead later in the auction. Having a strategy is the best way to avoid getting into a bidding war at a real estate auction.

Understand how real estate auctions work

The first step for being successful at this type of auction is to know what you are getting into. You should learn as much as you can about any properties that are being sold before the auction. If you are allowed to visit the property, this can help you get an idea of the condition of the home. You should conduct a title search for every property you are interested in as well.

Understanding the market value of the home and knowing the asking price is also vital. Be sure to decide what you will be using a property for before you bid. One home may be great for remodeling and selling, while another may be something you would like live in.

Every auction house has rules that it must follow when selling real estate. It is important to know what these rules are and if the auction house has any of their own rules you must follow. For example, the home may be required to have a reserve price so that the home is guaranteed to sell. You may need a minimum deposit in hand before you can bid as well. There may also be varying regulations on when information about the home must be provided. Calling the auction house and researching these auctions online are the easiest ways to get all of the information you will need.

Know how to bid

Once you have done thorough research and understand how real estate auctions work, you can arrive at the auction with more confidence. More experienced bidders are comfortable with the bidding process, so you must learn to be as well. Many bidders will wear business appropriate attire to show that they are professional and serious about the real estate auction. Others show their confidence by standing or sitting where everyone can see them.

You should show confidence that you are ready to bid so you don’t become intimidated, but it is more important to bid properly. Sometimes you must start out with a higher bid to show you are invested in getting a certain property. For some homes, it is better to bid low and see if the reserve price can be decreased. Knowing what and when to bid comes with experience, so you may consider attending real estate auctions as an observer to see how others bid.

Set a realistic budget

It is important to stay within budget when you are bidding. You can create a budget while you are researching the real estate you are interested in. Be careful not to set a budget too rigidly, as you may need some extra spending room to make a winning bid. For example, if you decide that $500,000 is your maximum bid and you are able, give yourself a budget of $510,000 to be safe.

Do not get too emotional during the real estate auction

More professional bidders may be familiar with starting a bidding war, so it is important to know how to avoid joining in one. Real estate auctions can be emotional, especially when there is a lot money involved. However, you can stay in control and within budget if you remain calm.

Even if you like a property, if you have not done the proper research, avoid bidding on it. Doing this could save you from making a bad purchase, but it could also prevent you from getting a great deal. This is why research is vital before you attend real estate auctions.

You should also be careful not to reveal any anxiety you are having about bidding. Some bidders will try to use your emotions against you and get you to drop out of the auction or get you to spend too much. If you show confidence in your body language and make eye contact, you can avoid being targeted by your opponents.

Real estate auctions in the Texas, Panhandle

If you would like more information about bidding at real estate auctions, contact the experts at High Plains Auctioneers today. We can answer any questions you may have on how to sell a property or how to buy real estate at auction. You can call us at (806) 244-6776 or Contact Us by email to learn more. You can also check out our Upcoming Auctions to see what we will have available.