Arnold
CibbuanoHow To Win An Auction
May 8th 2006 03:59
The first set is to do your homework and make sure you’re well prepared for auction day. If you’re purchasing jointly, make sure you discuss with your financial party exactly how much you are able to financially commit to the purchase. Visit a lending institute and discuss the finances to establish how much you can afford to borrow. This will define an upper limit to which you can bid. You’ll also want to consider what is a reasonable price for the property. You don’t want to overcapitalize or over value the property regardless of how much you are able to borrow. Make sure anyone who is going to be financially committed to the property is completely comfortable with the upper bidding limit and understands all risks and requirements. Factor in a bit of forethought. Situations change and you want to make sure you’re still in a financial position to make any necessary repayments. Job losses, newborns, deaths, interest rate changes and taxes are all future uncertainties. You want to make sure there is a bit of breathing space between your financial commitments and any potential disasters.
When auction day comes round, re-confirm that bidding limit and for the love of god resist all emotional urges and stick to it. Remember you set that bidding limit in a rational state of mind, the fever of an auction is guaranteed to set anyone in a highly emotional and irrational frame of mind. Make sure you are positioned in clear view of the auctioneer. Raise your hand when you wish to make a bid and establish your presence with the auctioneer. An auctioneer will assign a bid to whoever they see first, consequently an auction is not the place to be meek and mild. Assert some confidence and leave no doubt in the minds of fellow bidders that you have every intention of sealing the winning bid. Nevermind, that you’re shaking in your boots, its all about appearances.
As the bidding progresses, a point will be reached where the property meets its reserve. At this point, the property is “on the market” which means that a minimum value set by the owner has been reached and the highest bid will win the property. A good trick I’ve always noticed at auctions is to let other bidders battle it out at the early stages. This give you an opportunity to see what the likely price of the property is going to be and get a feel for the auction before you commit. As the bidding begins to slow, wait for the first call or second call, “going once.. going twice” and then strike with a bid. You can enter a small incremental bid, although I’ve noticed a bigger knockout bid is a better way to stop the potential for a bidding war. Say the bidding is down to increments of $1000. Jump in with a bid of $5,000 or $10,000 and you’ll tend to intimidate and stop anyone else from challenging you’re bid. Of course keep in mind your bidding limit. You should not be throwing around gun-ho bids that exceed your predetermined bidding limits.
More bidding tips to come… stay tuned.
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