Auctions can be an ideal place to get well-priced, yet quality properties. At a time when the Malaysian housing market is slowing, great deals are still available at auctions across the country.
Property can go to auction for several reasons. The first and most common is foreclosure. It occurs when a bank repossesses a home due to non-payment of mortgage obligations. Separately, property auctions can be held in homes that are failing to sell in the traditional marketplace or have other unique circumstances.
Purchasing auction property can be enacted on sites like Property Guru. It can also be a complex endeavor. To walk away satisfied, be sure to follow the below five tips for placing a successful bid.
Tip #1: Do your Homework
Arrive at the auction well armed with information. Properly done, this process will take some time, says an auction property observer on the Guardian website. Do not skip this step. Making a purchase is an important financial decision. Completing homework significantly improves the odds of making a successful purchase.
Research the area and reputation of the property for sale. Speak with local homeowners and residents to get a feel for the location. If possible, personally visit appealing properties. Check for structural soundness, cleanliness, safety, and other relevant features.
Also, take the time to attend a local auction as a trial run. It will provide keen insight into the prevailing practices and atmosphere of the marketplace. Take note of the bidding protocol, the habits of the auctioneer and speak with other bidders about the market if possible.
Tip #2: Understand Legal and Financial Requirements
Now it is time to investigate the legal and financial repercussions of a successful bid. Reach out to experts in law and secure sample auction contracts. Read and understand every line of the sample contract. Be prepared to sign a similar document when the time comes to make a purchase. Know what lines are desirable in the contract and which clauses to avoid.
Next, take the time to prepare finances in the event of a successful bid. Be ready to pay for the property in whole or speak with a banker about securing a mortgage. Understand the auction’s fees, taxes and other expenses that will be incurred when placing a successful bid.
Tip #3: Be Patient
Lucy Alexander from the BBC show Homes Under the Hammer says, “Patience is key to successful bidding. ” There will be many properties up for sale at the auction. It is no time to rush the process. Look for the best opportunity to present itself.
Remember, this is a big purchase. It is well worth the while to spend as many hours as necessary at the auction. It may even be possible you might go home empty handed. It is a good thing. Waiting for the right property to reach the auction block is a good idea while you gain valuable experience.
The property should be within the area researched in previous steps. It should be appropriately priced. Be wary of severely under or overpriced properties. Inquire into the reasoning for the pricing disparity. Be alert for properties that have outstanding liens attached to them.
Further, be sure the property has a clean title. Be alert for titles with outstanding liens. Examine records for prior damage or other red flags. If found, avoid them.
Tip #4 Stick to a Budget
The right property is on the block! It’s time to make a bid, and it is the fun part; however remember to proceed with caution. As humans, we are prideful. Auction crews love nothing more than a bidding war. Avoid this.
Leave emotion out of the equation as much as possible. Before starting to bid, have a maximum price in mind. This number should be a “line in the sand.” Do not pass this mark. It will ensure the property is secured at the right price. Remember to stick to the original number even in light of crowd or auctioneer pressure.
Tip #5: Cross the “T’s” and dot the “I’s”
Congratulations, if you won the bid. Coordinate with the legal and financial team contacted earlier in the process. They will provide guidance when it comes to making the appropriate payments and signing the documents. Take time to have a thorough look at the given contract and be sure this opportunity is right. Bidders have legal rights. If the property or contract is not as advertised, it will be within reason to walk away.
To conclude, auctions are a great place to pick up a property. Valuable opportunities are present here. In particular, the Malaysian auction marketplace offers more value than the stalling traditional real estate market.
To have a successful bid, ensure you follow the above outlined five steps. Do your homework. Understand legal and financial requirements. Be patient. Stick to a budget and cross the “T’s” and dot the “I’s” when it is time to sign the documents. Happy bidding and good luck!
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