Anyone have much luck at RE auctions? Can you really get properties at that big of discounts? What are the do’s and don’ts of buying properties at auction? Any good books out there dealing with purchasing properties this way?
Yes, I’ve bought properties at auctions and you can get good deals. The key to doing so is to attend auctions consistently and to do your homework before you go. The results of an auction depend almost entirely on who shows up. A lot of the time, someone will show up who wants to live in the property and they will pay a lot more than a successful investor will pay. Other times a newbie investor will come and they will also pay far more than makes sense. Occassionally, you will be the ONLY bidder to show up and then you can get a great deal.
Of course, it also depends on your local real estate market. If you live in a HOT market, there will be a lot more competition. If you live in a buyer’s market, less competition.
Good Luck,
Mike
If you haven’t been to one yet, I think your first step is to go and watch one (assuming you’re talking about the foreclosure auctions). Get a feel for who is there. In my area, it’s 100% investors.
You also need to understand the crying and bidding process before you go to an auction where there’s a property you want to buy. I say that because, again in my area, there are so many auctions that they have to do five or six sales at a time. You need to know who is going to be crying the sale for your house and where he will be standing.
It’s kind of funny (and sad) to see a crier doing his thing for a house only no one is listening…not even one person. He just looks like he’s standing there talking to himself in a public place.
I doubt that I’ll ever buy a property at auction. For me, it’s just too much risk to buy a house that I’ve not set foot in. Maybe if I were a high-volume operation where you can afford to win some and lose some and things come out in the wash, that would be OK. I don’t have the luxury of doing bad deals, though. And here in Georgia, you have to pay for the house 100% on the day of auction.
The other drag of auctions is that many of the houses don’t even go, so you could get all your funds together and pack yourself a lunch and cruise on down to the courthouse for the auction, only to find out that the property’s not even going to sale.
Thanks for the replies. I actually took your advice Paul and went to a local auction. What about any good books or other resources out there have any of you used? What area are you investing in?