The Danger of Buying at an Auction

August 19, 2017 Facebook Twitter LinkedIn Google+ Online Auction

Whether you are looking to get involved in the real estate game, or you are just looking for one really good investment, you’ll find that one extremely tempting resource for you will be the real estate auctions. Banks and other lending institutions will frequently hold auctions to get rid of property in a way that will allow them to recoup the most from the money that they have loaned and it is true that you can get some great deals this way, but you should remember that you should be cautious as well.

First, keep in mind that the atmosphere of an auction is an extremely exciting one, and that the auctioneers are trained to keep it that way. They are looking to heat the bidding up and to stir up the emotions of the people who are bidding, and you’ll find that it is easy to get a little carried away. Remember that the people who are running the auction have a vested interest for making sure that the items go for as much as possible, not necessarily what the items themselves are worth.

The unfortunate thing about auctions is that they are such emotionally charged spaces, and you’ll find that it is an easy plaice to buy on excitement, only to realize that when logic kicks in later that you have made a commitment that you should not have. When you are looking for good deals, you might find that you will focus on one property that you have to have, and the starting price is low enough that you will not be able to resist putting in a bid. When you bid once, you’ll be tempted to bid again, and this can snowball into something that you are not comfortable with!

There is also a very strong competitive aspect when it comes to real estate auctions. Whether you like or not, there is a good change that you will get the feeling that the person who is bidding against you is your enemy or at least your rival. It is important to take a step back and remember that what your are doing is buying a property. While you can “win” at an auction, remember that the one who “wins” in the end is the one who walks off with the best deal for their situation.

In many cases, when you are looking at an auction, you may want to consider hiring a buyer’s agent. You can pre-negotiate a consultant fee and you’ll find that they can be extremely helpful in this situation. When you are looking at a situation where you are buying homes “as is,” you are risking things like repair bills and code violations, so make sure that you bid wisely!

My suggestion is have a buyer’s Agent represent you. Since he/she is not emotionally involved personally will add a safety valve to the buying process..

My name is Lambert Munz and I have been licensed as a Real Estate Broker for 44 years with the CA Department of Real Estate. I currently am President of Arbour Real Estate Management, Inc. Background was as a commercial broker. Currently a property manager and have been for 27 years. We offer residential and commercial management services.