Bidding Techniques for a Real Estate Auction

When someone asks me how to bid at an auction, I am, at first, taken aback, to be honest. To someone who has been in the business for over 30
years, it seems pretty simple to me, but then I remember that more than 90 percent of our audiences have never attended a real estate auction. If you’ve never been to an auction before, you certainly don’t have experience bidding for a property worth millions of dollars. I think back to an auction for some cabins that my wife, Cindy, and I attended in the Smoky Mountains. We intended to buy a cabin, and although I’ve conducted thousands of auctions, I felt a little nervousness before the bidding started. With that said, let me share a few tips with you for bidding at an auction. 

  1. Understand what the bidding requirements are. Will a cashiers check be required to receive a bid package? If so, how much should the check be for? Do not risk not being prepared and not being allowed to bid. Do your homework to find out the qualifications. 
  2. Arrive to the auction early. Ensure you review all the auction information in your bid package upon registration and ask questions. 
  3. Understand the auction terms and how the bidding will be conducted. If it is land, will it be bid by the acre or for the total property? Will a Buyers’ Premium be added to your final bid? If so, how much?
  4. Meet the auction personnel, especially the bid assistants. They will be working with you during the auction. If you do not understand the auctioneer, ask for assistance. Remember that they do represent the seller, but they’re happy to help you understand. 
  5. Listen to the pre0auction announcements for updates. Sometimes property information may be changed with little notice to the seller or the auction company. Be sure you understand any updates. 
  6. When the auction begins, you will be asked to start the bidding. Don’t be afraid to start the bidding at a price you will be happy to own the property for. Other bidders will be asked to do the same with the auctioneer often starting at the highest opening bid. 
  7. Determine a range you will bid. Know the low and the high that you are willing to pay for any property. 
  8. When the bidding starts, BID! I often see people that regrettable did not bid because the property went higher or even lower than they expected, and they were afraid to bid. If the property is in your range, remember to bid. 
  9. Sometimes people strategize to bid fast or slow, or even in large or small increments. My experience is that none of these strategies really make any difference, so bid in a way that’s most comfortable for you. 
  10. Enjoy the experience. An auction is a matter of each individuals personal valuation of the property. We all place different values based on our personal uses for a property. What may be a bargain for one buyer may have been too much for another. Remember that all you are doing is paying one bid more than another interested buyer, and you are getting a true “real time” read on the market. 

I hope this helps. And by the way, Cindy and I won the bid on our mountain cabin. It was a fun experience with a piece of property we’ve enjoyed!

Have you bid at an auction before? What have your experiences been?

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~ by Craig King on July 5, 2011.

3 Responses to “Bidding Techniques for a Real Estate Auction”

  1. Good post–I’ve been enjoying your articles for a while. Check the blog on your iPhone, white on white (mobile version) is impossible to read!

  2. […] Story — Auction Crowd Bidding on Old StuffWhat You Should Know Before Using Penny AuctionsBidding Techniques for a Real Estate Auction .recentcomments a{display:inline !important;padding:0 !important;margin:0 !important;} […]

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