Auction on site by real estate broker?

Question

Hi my name is Han and I am totally new to real estate investment.

I was inspired by Lisa Phillips so was looking for property less than 30k at realtor.com.
I found property that says 15k and it says it is auction at site with 2500 cashiers check deposit.
Here is link http://www.realtor.com/realestateandhomes-detail/6...

My question is do you have experience about this kind auction? How did it go?

I just want to know overall experience.Also what do you think about this deal?

Thanks.

M Marie M. · Answer

@Jung-woong Han I bought my house via AJ Billig, I'm still getting it renovated so I can only talk about the process.

For one, $15K is the starting price. It would be good luck to get it for the starting price. I paid about $9K above the starting bid. It really depends on who shows up. Decide before you go what your limit is because you could get caught up in the emotions of wanting to win and accidentally spend way more than makes sense.

The cashier's check, I explained to the bank what I was doing and it was in my name so I when I lost an auction (I lost a few) I could redeposit it. I don't like carrying around a lot of cash.

Learn about the closing process for auctions. Luckily this wasn't my first property. I had some trouble finding a title company but the auctioneer's office recommended a lawyer who I communicated with via email. Also, I got no hand holding from anyone. Got title insurance just in case.

Ned Carey · Answer

@Jung-woong Han There is nothing wrong with getting your real estate license. However you are not likely to learn much about investing by having a license.  You can learn a lot about investing here on BP.  You might want to start with the Ultimate Free Beginners Guide under the education tab above.

The price in most auction listings is simply the suggested starting bid. Often the buyer has set a "reserve price" that is higher than the list amount and the owner does not have to sell unless it meets his or her reserve price.  There are several auction companies in the Baltimore area including one owned by Charles Parrish.

Account Closed · Answer

I know the auctioneer and the area - if you can get this for $15 or less - you would do well - the good thing that it is rented. You should see if the tenant is current with the rent - try to get a look at the rent ledger if you can.

ideas:

• find and talk to the owner before the auction - information is power
• try to inspect the property before the auction
• try to make a cash offer before the auction to eliminate the competition
• get comps in the area
• find out what else is on the market in the area - see how long they have been listed
• always go around the back and look at the back of the property
• be ready if you intend to go to the auction - have your cash lined up
• determine who pays the water and heat
• check to see if it is in tax sale
• talk to the tenant - they will tell you all the problems with the house
• check the MLS to see if it has been listed and for how long
• try to find out what the seller's problem is
• Have fun - this is a wonderful business.

Charles

Jung-woong Han · Answer

Thanks for all of your advice. I am still on saving asset and learning status. I am so glad that I found Biggerpockets and very caring members like you. Thanks.

Jung-woong Han · Answer

@Charles Parrish I appreciate your insights and great advice. I am working as a chef and totally new to this industry. What would be the best way to learn real estate industry? I am thinking about get a agent license.

Chris Martin · Answer

$15K is opening bid. See also the auctioneer web site for details and FAQ

Auction on site by real estate broker?

Most Popular Reply