Commercial property auctions can get your adrenaline pumped up as much as the next roller coaster does. It’s an experience like no other with its highest of thrills and the most chilling of scares. But once you make it to the end, it’s something that you’d likely want to try again. It’s addicting to say the least especially with its slew of benefits. Besides, it’s quite the joy ride for adventure seekers and risk taking investors.
I’ve been to a good number of commercial property auctions and if there’s one thing I could tell you, it’s that it’s a learning experience. Over the years, I’ve had my fair share of successes and few misses. With that, I’ve gotten hold of tricks and advice, some I learned by myself while others as a piece of knowledge handed down by my seniors.
Now it’s my turn to pass it on. Here are some do’s and don’ts to remember when participating in commercial property auctions.
Start to observe not to bid. Nobody enters the scene a master and a jack of the trade. Seniors investors advised me and what I soon realized after my first auction is that it’s best to sit the first one out. In other words, participate to observe not bid. This is the perfect time to have your first taste of the scene. Get familiar with the process and how people interact. Don’t feel too hot and heady to go to war just yet.
Never believe everything. Auctions are still sales only more competitive in the upfront sense. Take all information about the asset being sold with a grain of salt. You must first check and validate. Sales talk and sugarcoating are not screened. Always perform adequate research about the seller, the auction house and the asset. In fact, run a background check on the properties you like and visit them prior to the event.
Keep asking not answering. Keep your cards as close to your chest and avoid divulging information such as the assets you fancy and how much you’re willing to spend. They can be used against you. In fact, be the one to do all the asking. Inquire about the assets but don’t be too keen to the point that you show high interest because sellers might just raise the minimum price or other bidders might get the idea that you’ve found a treasure.
Prepare your financing early. When attending commercial property auctions, you have to be financially ready. Pre-approve and have your funds at hand because winning a bid won’t suffice. You need to pay for it, often with a percentage upfront.
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