How To Bid At A Real Estate Auction

With all the great deals going on in real estate now, you may want to get in on it. There are a couple of options. You can either look at making an offer on a short sale, or you can buy try to buy a foreclosed home at a real estate auction, or Trustee’s Sale. This article talks about the Trustee’s Sale and how to bid successfully at them.

Attend a Trustee’s Sale

One of the best things to do is attend a Trustee’s Sale. Take a notepad with you and don’t plan on bidding. You are just there to observe the first time. Get there early so you can see what happens before the auction starts. Often you must register with the Trustee in order to bid. Find out what type of deposit you need to put down in order to bid. Usually, you need cash or a cashier’s check of about $10,000 to put down on the property if you are the winning bidder.

Be punctual. Auctions are very structured and occur quickly, and the bidders are serious. Don’t make the mistake of thinking the auction will run behind schedule.

Paying for your purchase

Always have your financing figured out before bid on a property. You have two choices for paying for an auction home. First, cash is always accepted, but not always practical. Your second choice is to obtain a mortgage. Make sure you are pre-approved for a mortgage before bidding on a property. If your financing falls through and you have to back out of the sale, you could stand to lose some or all of your deposit money.

Have a maximum bid and stick to it

Find out about properties in your area and do some homework about values. Set your maximum bid, and do not change it. Don’t let yourself get into a bidding war based on emotion and then end up paying too much for a property. There will always be more Trustee’s Sales.

How do you find out what your maximum bid should be? Look at facts such as the market value of the property, what it will cost to fix up the house, existing liens on the house and closing costs. With these numbers you can come up with a maximum bid amount.

Meet the lender or lien holder

Find out if your lender will be at the Trustee’s Sale you are bidding at. It is important to meet with that person and establish a relationship. Also,  do the same to any lien holder of the property to help the transaction go smoother.

With these tips, you should be able to go into the Trustee’s Sale armed with knowledge for a successful experience.