Safety at auctions - Posted by John Behle
Posted by John Behle on March 14, 2000 at 15:47:38:
I would not bid on an auction property without knowing the value, the condition (and any problems) and the title (and any liens or problem).
Do not rely on their info. If the auction is at the last minute, be careful. Bottom line, don’t bid without doing the due-diligence. Also, set a bid price that you will not go above - NO MATTER WHAT. Investors get caught up in the “frenzy” of the auction and tend to over bid at times. That is the goal of the auctioneer.
There can be wonderful bargains at auctions, but also you could lose your shirt. Some even have plants (called shills) that will even help to bid the price up or make sure it doesn’t go below a certain minimum that they have set.
A lot depends on the auction and how many people attend. Some have bargains and many don’t - depending upon the makeup of the group, how well it was advertised, etc. Some even have “bait” that they advertise to bring the people out hoping that if they don’t get what they came for that they will bid on something else.
As far as doing the “due-diligence” that is required, you need to look at ways to do it quickly without a lot of expense, time and energy - while still not cutting corners. I detailed some of how to do that recently over on the Cash Flow newsgroup, but am not sure of the links right now. I’ll look for them a little later.