How Do You Prepare For an Auction as a Buyer?

Have you ever thought about going to an auction, but passed because you were unsure of the process? Or maybe you did show up to an auction but didn’t know what to expect and hence, you were not prepared? Here are some helpful tips for you as a buyer to be prepared and confident for your next auction.

Step 1: Financial Planning

Before you can bid on a property at an auction the most important thing you need to know is, what is the maximum amount that I can spend? First things first, you need to get pre-approved. Whether or not you are needing a loan for this purchase, it is recommended that you meet with your financial advisor to review the details. When meeting with your financial advisor the most important information that you will need to go over is:

1. Details on the property that you are trying to buy in order to estimate an income potential from that property. 

2. Balance Sheet with your assets (what you have of value) and liabilities (what you owe).

3. Cashflow Consideration of the money coming in and out of your account.

4. Cost of Production Evaluation of the costs it will take to produce your product (for income properties).

Once you have found out your maximum amount you can spend, it is time for you to move on to the second half of your preparations. 

Step 2: Auction Planning

Auctions can vary depending on the type of auction and the company holding them, so you want to make sure you understand the auction details such as:

1. Online, Live, or both

2. Location, Date, and Time

3. Terms

4. Bidding Options

5. Technology Requirements if you are bidding online.

6. Order and Flow If there are multiple tracts being sold, what order they will sell in.

Some other helpful things to consider are:

1. Where to sit (if live) in the front up close to have the best view or in the back to consult with whomever you need to.

2. Who to bring with you or to have on speed dial to consult with

3. You can ask for a break if you need a minute to discuss or make a call.

I understand that purchasing a property is a huge decision and want you to feel good about it. Being prepared with both financial and auction planning can help you make the best decision during a stressful time!

---- Kayla Hazard