Key Takeaways
- Research every auction property 3-4 weeks in advance with title search and exterior inspection.
- Set an absolute maximum bid based on conservative analysis—never exceed it.
- Online auction platforms may charge 5-10% buyer premiums—include in your bid calculation.
- Post-auction: change locks immediately, file deed, and begin property assessment.
Auction bidding requires preparation, discipline, and strict adherence to maximum bid limits.
Auction Preparation Workflow
Before the auction: research every property on the auction list (typically published 3-4 weeks in advance), conduct title searches on target properties, drive by each property for exterior assessment, calculate MAO with conservative repair estimates and 30%+ margin, set absolute maximum bid (do not exceed under any circumstances), and prepare certified funds per auction requirements.
Bidding Execution
At the auction: arrive early to review any updates or postponements, confirm your target properties are still scheduled, bid with confidence but strict discipline—never exceed your maximum, be prepared for competing bidders to push prices beyond your limit, and if you win, complete the payment and documentation process immediately. Post-auction: change the locks immediately (if vacant), file the deed, begin property assessment, and start your renovation or disposition plan.
Online Foreclosure Auction Platforms
Increasingly, foreclosure auctions are conducted online through platforms like Auction.com, Hubzu, and RealtyBid. Online auctions may provide longer bidding periods, photos and sometimes property condition reports, and the ability to bid on properties in multiple markets. Due diligence requirements remain the same. Some platforms charge buyer premiums (5-10% of the winning bid)—factor this into your maximum bid calculation.
Key Takeaways
- ✓Research every auction property 3-4 weeks in advance with title search and exterior inspection.
- ✓Set an absolute maximum bid based on conservative analysis—never exceed it.
- ✓Online auction platforms may charge 5-10% buyer premiums—include in your bid calculation.
- ✓Post-auction: change locks immediately, file deed, and begin property assessment.
Sources
Common Mistakes to Avoid
Exceeding the pre-determined maximum bid due to auction excitement
Consequence: Overpaying for properties that no longer produce target returns, potentially resulting in losses
Correction: Write your maximum bid before the auction and commit to walking away above that number. Have a partner verify your discipline.
Bidding on properties without first completing a title search
Consequence: Acquiring properties with surviving liens that exceed the discount obtained at auction
Correction: Order preliminary title reports on all target properties 2-3 weeks before the auction.
Test Your Knowledge
1.How far in advance is the auction property list typically published?
2.What is the single most important auction bidding skill?
3.What additional cost do many online auction platforms add to the winning bid?