Tips for auction buyers
 

1. Download a free tip sheet before you preview properties. 

The property descriptions provided by auction companies are often at odds with public records.  For example, the auction brochure may say a house has four bedrooms, but the tax assessor's records say it has three. Or a property may be described as being on a tenth of an acre, while public records indicate it's on half an acre. 

If it turns out the auction company made a mistake on a property you've bought, don't count on getting your deposit back.  When you register for an auction, you usually have to sign a statement agreeing not to rely upon any information provided by the company.

To help you, we provide free tip sheets that show the public records for some auctions.  Unfortunately, even public records can sometimes be wrong, so be sure to visit any properties you want to buy. 

To download a tip sheet, go the the Upcoming Auctions box to the right and click on the link.

2.  Decide on your maximum bid before you go to the auction.

Auctions are frenzied and loud, and terrible places to make big decisions.  Before you go to an auction, decide how much you're willing to pay for a property and don't bid more than that.  

3.  At the auction, pay attention to rival bidders

The REDC terms and conditions state, "Except where prohibited by law, the Auctioneer may open bidding on any Property by placing a bid on behalf of the Seller and may further bid on behalf of the Seller, up to the amount of the Reserve Price, by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders." 

How can you tell if you're bidding against a serious bidder?  Watch the bid assistants, who are usually dressed in tuxedos.  If they're not rushing to help a rival bidder, that bidder may just be pumping up the price.
 
4.  Ask the auctioneer to raise the bid by a smaller increment.

Suppose you're competing with another bidder for a property, and he bids $240,000.  The auctioneer then asks if anyone's willing to bid $250,000.

If your rival hesitated before bidding $240,000, you might want to ask to raise by a smaller increment, say by $5,000 to $245,000.

There's a chance your rival will refuse to go up to $250,000 and you'll win the auction for $245,000.   

 

If your rival seems reluctant to go any higher, ask to raise by a smaller increment.

 

 

 

Upcoming auctions
in California


February 13, 2008:  REDC auction in Stockton

Click here to download the Tip Sheet (pdf format) for the 2/13 auction.

February 16-17, 2008:  REDC auction in Sacramento

Click here to download the Tip Sheet (pdf format) for the 2/16 auction.
Click here to download the Tip Sheet (pdf format) for the 2/17 auction.


February 17, 2008  Kennedy Wilson auction in Fairfield.
February 23-24, 2008: 
REDC auction in San Mateo.

Click here to download the Tip Sheet (pdf format) for the 2/23 auction.
Click here to download the Tip Sheet (pdf format) for the 2/24 auction.

Williams & Williams regularly has small auctions throughout California.

You can also bid online at RealtyBid.com, epax.com, and eBay.com.

 

5.  Do your homework.
  • Call a few insurance companies to find out if the home is insurable at reasonable prices. 
  • The Megan's Law website will let you know if any registered sex offenders live nearby. 
  • Sperling's Best Places is a good source of information about crime rates, schools, weather, and so forth.
  • Go to GreatSchools.net for information about the quality of local schools.
  • City-data.com has discussion forums about cities and neighborhoods.  Type a city and state into the search box, and you'll often be rewarded with local gossip about different neighborhoods.
  • Talk to neighbors.  They can often give you useful information about a property.
  • McCormacks offers lots of useful information about California cities.
  • If you're buying land, go to the county planner and discuss zoning restrictions on the parcel.
  • If the home is governed by a homeowners association (HOA), ask about monthly fees and CC&Rs. If you're buying a condo or cooperative unit, ask to see the association's legal and financial documents.
  • For inexpensive parcel maps, go to netronline.com.
  • Neighboroo.com has color-coded maps that let you see how neighboring zip codes rank in terms of home prices, school quality, foreclosure risk, and so forth. 
  • Zillow.com provides "Zestimates"--rough estimates of properties values--for millions of homes.  By typing in a city or zip code, you can pull up a map that will let you see how property values vary by neighborhood.  Don't put too much faith in the Zestimates--they can be wildly inaccurate.  But use them to get a sense of how your target home fits into the neighborhood.  It's usually better to buy the cheapest house in the neighborhood than the most expensive. 
  • Make sure you've budgeted enough money to pay the buyer's premium and closing costs.   Read the auction company's terms and conditions to estimate how much money you'll need to close the deal.
About the author of AuctionTipSheet.com:

Economist Lori Alden taught at California universities for almost 20 years before becoming a licensed broker.  She's also the author of CapturetheCommission.com, a website for real estate buyers, and FSBOPrimer.com, a how-to website that has been recommended by The Wall Street Journal, The Washington Post, and other newspapers. She’s also appeared as a featured guest on the nationally syndicated radio show Real Estate Today. 

Alden and her daughter own several "For Sale by Owner" (FSBO) websites, including FSBOSonoma.com, FSBOSolano.com, FSBONapa.com, FSBOAlameda.com, FSBOContraCosta.com, FSBOSac.com, FSBOSantaClara.com, and FSBOSanMateo.com.  Alden also owns SixHomes.com, a discount brokerage for buyers.

Alden has developed other public service websites, including The Cook's Thesaurus, a guide to ingredient substitutions, Econoclass.com, a resource for high school and college economics instructors, and EqualShares.com, a website that explains how to divide property fairly among heirs, divorcees, and other.

 

 




Copyright © 2007 Lori Alden.  All rights reserved.