Have you ever been to a real estate auction? It is really a lot of fun! Real estate auctions take place all around us every day of the week, yet I’m always amazed at how many people have never attended one or are simply afraid to buy real estate at a public auction.
Why shouldn’t you? They are free-to-attend events and a fantastic way to get a great buy in real estate! Even if you aren’t in the market to buy right now, real estate auctions are entertaining adventures allowing you to people-watch and educate yourself about the current market.
In many local communities, real estate auctions are much like warm family reunions; you never know who or what will show up or happen.
I personally have purchased numerous properties at public auctions and the thrill and adrenaline you feel when getting the winning bid is similar to that of winning a coveted prize! I have actually attended many auctions where I had absolutely no intention of purchasing the property and ended up walking away with the winning bid!
Just to name a few, I have been the winning bidder on a one-hundred acre farm, an oval dirt racetrack (that’s a story for later) and a nice rock exterior home.
The Rock Home
The beautiful rock exterior home auction had at least 50 or more people in attendance. With no intention of purchasing the lovely home, I went to the auction to get an idea of the market and hey, it was a beautiful day just to get outside and people-watch!
The auction only lasted about 30 minutes and as the auctioneer started the count-down, I jumped in to bid on a whim. I ended up with the winning bid on the lovely rock home!
Walking to my car after the sale, I was approached by a young, wide-eyed couple that had apparently arrived too late to the sale. The couple stopped me and asked, “Did the home sell already and who bought it?” I answered, “It was me; I just purchased the home.”
The agony and disappointment on their faces made it obvious that they had planned to purchase the home. Long story short, the sweet young couple offered to purchase the home from me at a $10,000 profit. We closed on the home within 30 days.
A Land Auction
Another unique auction I attended included a 3-acre vacant piece of land in view of a busy interstate. It was an estate sale held on a rainy Saturday morning and believe it or not, only two people showed up excluding the auctioneer.
It was a publicly advertised land auction, and my purpose for attending was to get an idea of the land market. The auctioneer held the auction as advertised, and I ended up purchasing the property with the winning bid.
With only two potential bidders and one of them bidding only once, the auction sale was over in 10 minutes. Within a year of the land purchase, I sold the property for triple the price paid to a local gentleman wishing to start a landscaping business!
Okay, have I got you itching to attend a real property auction sale now?
Most real estate auctions are held in-person; however, there are quite a few now being sold “online” only due to the Covid pandemic. An “in-person” sale is by far the most exciting and rewarding!
#1: Note Sale Times
First, before attending an auction, read carefully the advertisement for the auction and understand the timing of the sale, as well as the place and details of the property being sold. Often, a real estate auction will also include personal property that will be sold at a separate time on the same day or a different day. Note the time and be sure you know the difference in the real property and personal property sale times.
#2: Show Up Early
It is a good idea to show up at the auction sale property a very minimum of 30 minutes prior to the sale giving you time to park, read any posted information on the property, register to bid on the property (no cost or obligation to do so) and perhaps talk to agents or other bidders on site.
The earlier you arrive, the more time you will have to inspect the property to be sold and look it over. It is exciting to walk into a home or walk over a vacant piece of land and wonder what bit of history took place in the past.
You could be walking over a former war battlefield or into the former home of a celebrity or even a well-known criminal. You may even end up seeing unique architecture or home décor to die for! Or even see some really strange home features… those I will leave to your imagination!
Most real estate auctioneers will allow you to view the property prior to the auction with advanced permission or “open houses.”
#3: Don’t Mingle After the Auction Starts
Once the auction officially starts, try to avoid talking or visiting with others as to avoid disturbing possible serious bidders. Who is a serious bidder? You never know until the sale starts. It could be the business man over in the corner, or the petite retired lady in the front row or it could be a farmer in overalls standing in the back.
#4: Pay Attention to the Auctioneer
The auctioneer will explain the process of the auction, sale terms and answer any questions prospective bidders may have. I typically place myself at the back of the auction crowd where I have a grandstand view of all the bidders, yet continue to have access to the auctioneer or an auctioneer ring-man (helper) to place my bid.
#5: Observe Bidders
Watch carefully and observe who is bidding, the amounts they are bidding and how often they are bidding. The auctioneer will start giving hints as to when he is ready to end the bidding and most auctioneers will have an official countdown prior to accepting the winning bid, such as “going once, going twice, going three times, sold”!
#6: Be Patient
Some auctions may take as little as 15 minutes to sell a property or take as long as several hours to sell multiple pieces of real property. If I am planning on bidding on a piece of property, I usually wait until the very end or just before the auctioneer countdown to bid in an effort to not raise the price up before selling.
Other people have their own techniques and strategies in mastering the winning bid, but I find waiting until the last minute to bid works well for me. Remember that you are free to leave the auction at any time and you are never obligated to bid unless you want to.
#7: Do Your Research!
If you attend an auction as a serious purchaser/bidder, be sure to do your due diligence and research the market values before you raise your hand to bid. Be careful not to get caught up in the exciting momentum.
I attempt to set a fixed price in my mind prior to any auction I attend. This helps to prevent me from bidding more than I intend. Once you bid, you are guaranteeing the auctioneer that you will pay that price within a certain time period, so be sure you are a serious buyer and have your finances in order prior to bidding.
Attending a real estate auction will give you a feel of what the real estate market is doing in your area. If you see a lot of attendees and bidders, it can be an indication of a hot market. If you see a sparse crowd, the market could be showing signs of distress or the property being sold is not an attractive buy.
I personally enjoy the enthusiasm of an auction! Watching auctioneers chanting, watching bidders with their emotions and their reactions during the sale is much like a live suspenseful drama!
Have you been to an unusual auction? Purchased an unusual property? Feel free to share your experience!