and the organizers are very good at getting the bidding rolling. The average they obtained at my most recent auction was 75% of the “listed for” price on the brochure. They usually have a “reserve” price below which the lender must approve the offer, and they usually don’t. The “starting bid” prices are just to get people in the door and I have not seen any properties go for anything close to these prices.
Approximately 40% of the properties at the auction I attended in Denver failed to get accepted by either the buyer or seller for various reasons. They e-mail a list to you later and you can offer then. Often time its because the lender wanted more, so if you did not “win” the bid, you probably won’t get it then either.
Remember that they add 5% to your winning bid for the auction expenses. So a $100k bid is actually $105k.
If you are going to a US Treasury Dept. auction, many of those properties actually sell for above market.
So observe the process, if you know what properties you want to bid on and what you are willing to bid, stick to your limits. They are experts at getting people “caught up” in the moment and going way over what would be reasonable for them to pay. Make sure you inspect each property thoroughly. Some of these are listed low for a reason and you don’t want to win a pig.
Hi
Am a new investor looking at various possibilities. Am planning to attend the mega auction this wkend for VA/MD/DC properties - primarily to know first hand how things are done. I wonder if its a good place to buy one of the couple of properties that I did visit if and only if they are sold at unbelievable prices(which I doubt). Even if they do, is it good to buy at auctions ? What shd I be aware/cautious abt ? What are your thoughts ? Have any of you done that in the past ? Can you refer any other auction houses/ sties ? appreciate your responses
PS: My biggest issue is coming up with money on these auctions
Re: Buying at Auction this wkend - VA/MD/DC - Posted by Natasha - MD
Posted by Natasha - MD on March 08, 2008 at 09:14:12:
Hey Raj,
About 6 months ago I too started looking at auctions in the Washington Metro area both as an investment option as well as for my personal residence. I had the same concern about money. I got in contact with a Sallie Mae counselor and she gave me some helpful info. I also go guidance from two investors in the DC area. Have you thought of conventional as well as creative financing?
