I am sometimes asked ‘what is the best way to buy a property at auction?’ and my answer might surprise you. This answer does not work for every case as there may be some deals where you have to buy the property while it’s in the auction on the day. But some of the very best deals you are going to get at the auction are properties that don’t sell.
As I mentioned previously, I will always go to the auction to bid, partly to see what the room is like, partly to see how enthusiastic other bidders are, partly to see what the market is like, partly to get a feeling of what is selling and what isn’t.
One of the main reasons why I actually want to attend the auction is because if the property I want to buy didn’t sell, then that is a great time to go up to the auctioneer’s assistant and to make an offer there and then in the room.
Think about it this way, the auctioneers put the property on the market to sell, the vender has put the property into the auction to sell and you would imagine that if the property didn’t sell at the auction then the vender is going to be particularly disappointed. Putting it bluntly, the auctioneer is going to want to make their fee in commission so they will be fairly highly motivated to get the property sold as well.
If you can be there at the sweet spot where the property hasn’t sold to make an offer, an offer that makes sense to you that may be a low cheeky offer, depending on the property and what you are going to do with it, then that would be a great time to buy a property. If I had the choice I would go to the auction, I would hope that the property I wanted to buy didn’t sell at the auction, and then I would make an offer, post auction.
I have met traders, that are traders as opposed to investors who hold the property, who trade by going to the auctions, they wait at the back with their catalogue and they mark out all of the properties that don’t sell. Then either at the auction or the next day they go back to the agent and they will make offers on multiple properties based on the catalogue, without even viewing the properties. So, they will make offers on the properties because they haven’t sold, and they know that the vender and the agent are probably going to be aggregable to doing some kind of deal on the property.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to: