I am about to enter into an auction for a property that was originally listed on the MLS. Before I secured my financing (which took about 7 days), the bank placed the property in auction. I am alittle upset that I have to go this route but I am emotionally invested at this point so I am going for it. This will be my 2nd online auction. I lost the first one because I refused to pay a dime over my limit. I am somewhat skeptical because I too, feel that there is a ghost bidder. My question.....Is the bank looking for what it was originally listed for on the MLS or more? I was willing to offer full price.
Which online site? Most auction sites list their properties first on the MLS, not because you can make an offer and buy them then, but to simply market the property and drive buyers to the auction. Many times the MLS price is a low ball meaningless price.
Watch for those words "I am emotionally invested at this point, so I am going for it." I admire your fortitude for losing the first auction. It's important to stick to your buying rules. Now, when it comes down to it, it might still be a good deal, but take the time to evaluate if this fits your goals, and if you can still make money on this if the price goes up. Being emotionally invested is a great way to blow up a deal and lose a lot of money. Even though you should be passionate about your investing, the properties have to make sense from a strictly pragmatic perspective. I'd much rather barely miss an ok deal than pay too much for a bad deal. If it's a home run, and you know it's a home run, go all in!
I'd take a step back and look at the big picture. If the auction ends low enough that it's in your target range, it's probably still a good buy, even if there are others bidding against you. The bidding process is sometimes clumsy and frustrating, but the difficulty helps drive other buyers away - there are at least some deals out there for REO properties!
There's no problem with being pre approved before you pull the trigger on a property, so at least it got you that far!
Homesearch.com is the online site. Also, point well taken regarding my comments about being emotionally vested. I am speaking from a homeowner's perspective rather than an investor. @Wayne....the property was listed low on the MLS, however, I pulled comps and that low ball area is supported. That area was hit hard in the real estate crash and has not come back. From a homeowner's view, its a beautiful property in a great school district and needs no work at all. The auction is in a few days so we will see how it goes. I have a bottom line and I will stick to my guns. I will keep you posted. Thanks for the input!
"Ghost" bidding is done by theses auction sites to drive the price up towards the reserve; once reserve is reached (if it is even reached of course), the ghost bidding is supposed to stop.
Yep, you couldn't have bought it off the MLS anyway, it's auction only. And yes the auction co.s will bid on behalf of the owner up to a certain level. Just stop when you reach your number, and if you're the high bidder, not meeting reserve, you'll likely get the counter offer/negotiating call.
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