When a bank-owned home comes up for auction there will be a minimum opening bid. Nobody knows what that minimum bid is until the property is placed “on the block.” There will be a period of time, usually a couple of weeks, for bidding. Often, the bidding is transparent. That means you know what the other bids are.
We’ve been to this rodeo before, and here’s what we like to do:
(1) We place one bid very early in the process at the minimum increment allowed. This lets us test our registration and connection with the auction house. We learn, in seconds or minutes, how long it takes for our bid to be accepted.
(2) We pre-determine our maximum bid –no matter what. We do not get swept up in a last-minute bidding frenzy. We keep a cool head and don’t over-bid. These auctions can bolt like a frightened steer.
(3) About a half hour before the bidding closes, we will follow the auction closely on- line. We will make our final bid just before the auction closes, trying to be the last, or one of the last, bids. This assumes that the bidding price has not already exceeded our pre-determined maximum.
How successful are we? About 50/50. I think that’s great! Imagine if a major league ballplayer batted .500! We’ve won some, lost some. When we lose it’s because a bidding war explodes–which is exactly what the banks who own these properties want to happen.
Keep in mind, also, that we are playing against other cowboys who also know how to ride a bull. We are not the only professionals at the rodeo.
We’ve also lost . . . and then won. How’s that? We have lost, narrowly, and a week later the auctioneer calls us on the phone. Now he’s our best friend. The previous winning offer was flakey or weak, walked away or failed to consummate the purchase for some reason. “Will we consider going ahead with the purchase at our final bid price?” Pretty please.
You see, the banks are breathing down his neck. “Why did he accept that weak bid? What is he going to do about it? Get this property sold, now, Mr. Auctioneer, or we will find someone who can.”
Now we are in the driver’s seat. We like being in the driver’s seat, don’t you?
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