Oct
04
Foreclosure Homes Auctions: Strategies For Success
Posted By: Ramon Rivas on October 4, 2010 at 8:54 amBy: Joseph B. Smith
One of the best times to invest in foreclosures is to take advantage of foreclosure homes auctions. These auctions provide many exciting opportunities for the buyer especially those who look forward to seeing a lot of different options from which to select their properties. When a defaulting borrower fails to make current his obligation to the bank or lender, the latter would then try to sell the property in a public sale in order to recover its money. Since banks would be aiming for a quick sale of these properties, it is not uncommon to find foreclosure homes that are truly priced way below their actual market values.
Strategize Your Entry
Of course, joining foreclosure homes auctions is not an easy task particularly to those who have yet to experience one. The good news is you can actually learn it in an easy manner and in a short time. By researching how an auction is conducted, one can have a good idea on how to participate. An auction is a special event that has its own set of rules that a participant must follow to be able to bid. It would be thus helpful if you know these rules so that you can conform to what is required in the event.
One good strategy is to attend an auction first without bidding. Your goal here is to primarily just observe how everything works in an auction. Observe the people, bidders, auctioneer, the bid amounts and the properties being sold. Interact with the bidders and subtly ask questions that may help you when your time comes to bid. It would be a good thing if you can do this at least three or four times before you join one yourself. In this way, you become familiar with the whole process and confident to bid on your own.
In addition, researching the properties before the conduct of foreclosure homes auctions is a good strategy. This means that you can build a list of properties that you are going to bid for based on the results of your research. In this way, you will avoid wasting time and opportunity at the bidding event itself. When you have a list of foreclosure homes that you are confident about, you will never have to worry about going home unsuccessful.About the Author
Joseph B. Smith has been educating buyers on the finer points of foreclosure homes auctions at Foreclosure-Auction.net for over five years. Contact Joseph B. Smith through Foreclosure-Auction.net if you need help finding information about foreclosure homes auctions.
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auction companies are the ones gaining the most in this widespread use of foreclosure auction. They became busier than ever. When lenders and homebuilders are ready with foreclosed homes, they hire auction firms to find buyers. These thousands of foreclosure filings made each month have attracted large numbers of investors in foreclosure auctions due to the good deals embedded with each foreclosed property. This increased the opportunities of the auction companies to a great extent.
Due to the popularity gained by foreclosure auctions, new players started to enter into the auction business. The large numbers of ready-for-auction foreclosed homes led some real estate companies to taste the success of the aforementioned auction business too. These real estate companies also started an auctioning division to compete with the traditional auction firms. Since the number of foreclosed homes is incrementing on a continuous basis, the auction business proves to be one of the most profitable investments that will run for a long time.
Buyers became increasingly interested in bidding at a foreclosure auction because of the great bargains involved. First time buyers and real estate investors are attracted by the ever decreasing prices of houses as well as the comparably cheap amount of mortgage. The deals will rarely be disappointing in foreclosure auctions because the sellers are mostly government bodies who are least concerned about making profits. Furthermore, the prices of foreclosed homes are much lesser as compared to those available in the real estate markets. Many of the buyers also enjoy the environment of bidding in an auction rather than dealing with a seller face-to-face. These are some of the reasons why buyers have been pulled towards home auction.
Before the event starts, buyers are required to register in order to receive a bid card for the auction proper. Bidders must also bring with them the required amount of cash or cashier’s check, which all depends on the properties being auctioned by the auction company. Upon winning the bid on a property, the winning bidder must pay a percentage of the price as well as the amount of commission to the auction company. In some instances, bulk buyers are required to pay more and the required financial arrangements have to be made the same day.
The areas which are prone to foreclosure auctions are mostly the locations where the developers have overbuilt properties. They have either overlooked the economic downslide or the slow moving real estate business in those areas. Some buyers in foreclosure auctions are either looking for a place to settle down in or simply looking for a cheap home property to develop and sell in the future.
Most of the auction companies appoint their own bidders, otherwise known as shills, to conjure a bidding competition in order to tempt the “real” bidders to bid higher, thus increasing the selling price of the auctioned property. This must be disclosed before the auction begins so that the actual bidder knows whether he is bidding against an actual buyer or a shill. This practice is prohibited all over the Unites States; however, there is a lack of monitoring bodies to facilitate a fair auction. Sadly, this is mainly used by the auction companies to increase their commission amount. It is wise to be on the look out for such bidders that you may have seen working before the auction began.
A buyer should always be cautious when deciding to attend an auction. Only go to licensed auction companies or real estate brokers who can give you a clearer view on the properties being auctioned as well as provide the pros and cons of each property. It is better to go for absolute auctions rather than reserve auction. You should be certain that the auction companies allow you to represent your own attorney. Always remember to collect all the required information before attending an auction, so as to avoid surprises in the long run.
Apr
23Selling Real Estate in a Sluggish Market
Posted By: Ramon Rivas on April 23, 2010 at 10:16 amreal estate is one commodity that many depend upon to get them through the rough times in their investment strategies. The problem is that unlike stocks and bonds, real estate is not the most liquid of assets to turn into cash when the going gets rough and money is needed immediately. This may be the one large drawback when it comes to real estate. You cannot rely solely upon real estate to get you through the financial rough patches, as real estate is a very fickle market.
There is only one way in which real estate can truly be sold in a sluggish market such as the one that is rocking the real estate world at the moment and that is not always a way that is ideal for investors. However by offering an exceptional value to consumers, you can almost always manage to sell real estate. This is by far not the method of choice for investors. Investors are often encouraged to hold onto properties during the rough patches by any means possible (and ethical of course) in order to get the maximum profit they are hoping to accomplish in the endeavor. When this is not possible, make sure the property being offered and sold is the best value for the money that is presently on the market.
Play up the attributes of any given property and offer several properties for sell at once (assuming you own more than one). More importantly, offer different types of properties rather than one style of property. If you own a few rentals, a couple of vacation homes, time shares, and maybe a corporate office building or two put one of each on the market and see which sells more quickly.
Another thing that must be considered in a sluggish market is that you cannot attach an emotional value to the price of the property. This is simply bad business. No matter how much sweat, tears, and blood have gone into the property you must realize that just as it is a business transaction for you, so it is for the person placing the bid. You cannot afford to run off potential bidders by becoming insulting or feeling insulted by their bids. Make a counter offer and see what happens rather than letting emotion rule the day. In a buyer’s market there will be low offers.
There are many who make livings (like most investors are attempting to do) by buying low and selling high. This means they will make an insultingly low offer the first time around to see where the seller stands. This doesn’t mean they are the scum of the earth only that they are in this for the greatest possible profit. Do not take their actions or attitudes personally. They are not insulting you or the property only attempting to gain the most money in the process. Most businesses operate that way no matter what they claim.
Selling property in a sluggish market can be a disappointing and gut wrenching process but it is often necessary for one reason or another. Unexpected expenses arise and money is needed when it is needed. This is after all why we make these investments in the first place, to be able to handle the unexpected twists and turns that life tosses our way.
