No deals for me today! I didnt get. Not really a big suprise. Highbid was 422,500. My max price was 341k. Rents were about 4k per month. I think the selling price was pretty much full market value for this property.
Lesson for the day, which i already knew, stay away from the crowds. I need to figure out a way to put myself in the position to get these properties before the entire investing public knows about it. This property was in a trust that was being handled by a bank. Had I known an insider at the bank, i might have been able to pick this up at a lesser price.
For the first time, I am going to a RE auction and I plan on bidding. The property is an 8 unit. I’ve got my financing lined up and I know the max price i’m willing to pay.
My question is more to do with the actual bidding. Whats the best way to bid? Are there any techniques I can implement to help me get this property for the price I’m willing to pay.
Should I be the first person to bid?
Should I be agressive with my bidding?
Should I up the bidding in large increments to try to scare people away?
Should I just sit back in the beginning and watch other bid and step in towards the end when the bidding looks like its slowing(assuming it the bid hasnt already exceed my max price)?
Posted by Natalie-VA on August 21, 2007 at 11:45:51:
Andy,
I’ve been to hundreds of auctions over the years and have a few thoughts. A lot of it depends on the auctioneer. Some will keep the bidding open for several minutes before dropping the hammer. Others will say, “Once, twice, third and final, SOLD!” I’ve seen many investors lose a house they wanted because they were playing games and didn’t want to bid until the last second.
Since I’ve been to so many auctions and have gotten to know the other players over the years, I’ve always tried to behave inconsistently so that they can’t figure me out. You aren’t going to have the advantage of knowing the other players.
So, in answer to your questions,
No, I wouldn’t bid first unless it looks like the auctioneer is going to drop the hammer.
No, I wouldn’t be too aggressive with my bidding or use large increments. Some of the old timers will bid you up just to see you spend more money if you behave that way. I would just use the same increments as everyone else.
All in all, none of it really matters except that you stick with your price. Also, if it comes down to you and one or two others, don’t hesitate when you bid. I usually know when a newbie is getting close to their number because they reexamine their notes, or talk with their spouse or partner. If I really want the property, I can tell that they might drop out soon, so I hang in there.