Re: Bidding Too High At Auctions

“Why do they do it?” I asked myself again after the auction. I was walking away frustrated – again.

Why do people bid so high on properties at auctions? For a long time I would ask myself this question. Finally, I got smart and started asking the people who bid.

Then I discovered something interesting.

Up to that point I only looked at an auction from the point of view of an investor who wants to flip or rent the property. What I realized was – sometimes – other people with different circumstances show up and ruin our “investor” plans.

Sometimes they know something you don’t. That’s the most common answer.

Maybe that high bidder is someone lives next door and wants to control the property (and the tenants) and keep it as a rental. That was the answer when I asked why a guy bid so high – clearly more than an investor should have bid on the property.

Maybe someone wants to live in the property. If someone really wants to live in a neighborhood, but is getting bid out of properties via the traditional MLS/Realtor/Retail market – they clearly will pay more than we would as an investor. That retail buyer is a little more rare.

If someone wants to control who their next door neighbor is, or really wants to live in a neighborhood – both have “inside” knowledge of the area.

Maybe they even know the condition of the inside of the property – one of the biggest risks of buying properties at auctions. I have one of those right now. It’s a competitive edge on other drive-by bidders. I hope it turns out well.

The March WREIA meeting is tomorrow
Monday, March 19th, in Bethesda.

The auction atmosphere is exciting – but it is only the beginning of a larger process. Many times the properties don’t sell at the auction and go back to the bank. There are a lot of things that happen at an auction that will give you clues as to what to do next if you are interested in the property. I have bought some great properties from banks and lenders after I lost the bid at the auction.

Come on out this Monday and discover a few things about auctions and REO’s it took me years to learn. In the last few decades I have attended hundreds of auctions that resulted in the purchase of many dozens of properties. I am happy to share the lessons I’ve learned with you tomorrow at WREIA.

Join me on March 19th as we talk about the entire process that goes on behind the scenes at Auctions. It’s a fun topic that I am going to break down into easy steps. By better understanding these steps you will have an edge over your competition and might be a little happier with your 2018 results.

March 19th is a great opportunity for you to ask a few questions like:

• What areas have the best auctions in 2018?
• How, and where do I find partners for my successful bids?
• How often do you win a bid?
• What mistakes do you see people making with Auctions?
• How and when does a real estate agent get paid in the Auction properties?

Save a few dollars and reserve your seat early. Then, come join us at WREIA – TOMORROW – Monday, March 19th. It will be a great way to start the spring season, get you motivated, and get some momentum for the rest of 2018.

Join us as we talk about Auctions in the DC area.

Meet real people doing real deals in real estate – right here in the DC/Baltimore area.

Reserve your seat at this link.

Have a great weekend!

John Peterson
Founder, Washington Real Estate Investors Association