Posted by Jimmy on April 26, 2007 at 12:31:39:
I’ve attended and bid at a number of auctions. IRS auctions and county tax sale auctions. always seem to get outbid when I am going after houses.
I have acquired a number of undeveloped lots at tax sale auctions. not as many people are interested in these things, which is always an advantage for the buyer.
a few observations:
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the nicer the place, the less likely it is you will get a bargain. but that rule breaks down when you get into super-expensive stuff. there’s a 10,000sf mansion in Tulsa right now available in an IRS auction. not many folks can swing it. this could be a steal.
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do your homework. pull a preliminary title report and get a handle on the existing liens. inspect. know what you are getting into. calculate your top price and DO NOT go over it. I’ve seen auction fever before, and in ain’t pretty. I’ve seen bidding on properties where the bidders clearly were unaware of some big liens.
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the better-attended the auction, the less likely you are to get a bargain.
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properties in need of major work can be great opportunities (in auctions and any other situation). I did get a HUD property this way. not really an auction, but a ratcheted bidding process. it was a 4-plex (which will attract a lot less bidders than an SFR) in terrible condition (which scared everyone else away). after 4 rounds of price ratchets, HUD was willing to accept any offer. and I was pleased to make them an offer at that point.
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would-be owner occupants will usually bid more for a house than wil an investor. but that’s true in most situations, auction or otherwise
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I was not in the biz in the 80’s when the bottom fell out of Houston, Dallas, Ok City, Denver, etc. If those conditions re-appear, it could be fun (well, for a few people, anyway).