Uncategorized How To Win A Real Estate Auction
Winning a real estate auction through Alex Cooper Auctioneers requires careful preparation, strategic bidding, and a clear understanding of the auction process.
Below we will go over some key steps to increase your chances of success at a real estate auction:
Do Your Homework On The Property
Research the property thoroughly before the auction. This includes understanding the property’s market value, condition, and any legal encumbrances such as liens or back taxes. Information can often be found in the auction listing or through public records.
Please refer to the terms of sale on the property page to see if the real estate taxes will be prorated from the date of sale or the date of settlement.
Secure Financing
When participating in an Alex Cooper auction, it’s important to have your financing secured in advance, as properties are not sold contingent on financing. Additionally, you’ll need to factor in a buyer’s premium, typically around 6%, added to your highest bid to determine the total contract price. For example, a winning bid of $500,000 with a 6% premium would result in a contract price of $530,000.
Immediately after winning, be prepared to deposit 10% of the purchase price, often requiring a cashier’s check or wire transfer within 1 business day. This deposit secures your commitment to the transaction, covering initial costs and signaling serious intent.
Understand the Auction Terms
Familiarize yourself with the specific rules of the auction. This includes registration requirements, bidding increments, buyer’s premiums (additional fees based on the sale price), and any deposits or earnest money required.
Set a Maximum Bid
Decide on the maximum amount you are willing to spend based on your research and financial considerations. Stick to this limit during the auction to avoid getting carried away by the competitive atmosphere.
Inspect the Property
For many of the properties listed on Alex Cooper auctions, you have the opportunity to inspect them before placing a bid. It’s recommended to contact the auction agent responsible for the property to arrange an inspection.
Additionally, many properties feature scheduled open houses, which are advertised, allowing potential bidders to thoroughly assess the property prior to the auction. This step is crucial for making an informed decision about your bidding strategy
Bid Strategically
During the auction, remain calm and bid confidently. Start by bidding low and increase your bids in response to other bids. Keep an eye on your competition and try to read their behavior.
Our platform utilizes soft close functionality where any bids under 3 minutes reset the clock to 3 minutes. You can also utilize a max bid functionality where the platform will immediately outbid competitors up to but not to exceed your maximum bid. This is good if you are looking to participate in an auction where you cannot be present for the ending or if you just want to have a max bid and not go a dollar higher. It’s possible that the auction will end below your max bid.
Plan for Post-Auction
If you win, be prepared to finalize the transaction quickly. This involves signing the contract, paying the 10% deposit, and meeting any other conditions stated in the auction terms.
By following these steps, you can enhance your chances of successfully purchasing a property at a real estate auction. Preparation, research, and disciplined bidding are key to navigating the complexities of auction purchases effectively.
Takeaway
As you explore the possibilities of real estate auctions with Alex Cooper, remember the importance of due diligence. Scheduling inspections and attending open houses are vital steps to ensure you are fully informed about the property you’re interested in.
Each property has unique characteristics and potential, so take the time to understand exactly what you’re bidding on. Whether you’re a seasoned investor or a first-time auction participant, Alex Cooper’s platform offers a transparent and efficient way to expand your real estate portfolio. Happy bidding!