Commercial property auctions have fast become one of the more popular platforms by which entrepreneurs and business owners acquire their needed real estate assets. Even investors who trade properties for resale or lease on a profit frequent these events. Given the opportunities they ever so gladly provide, it should no longer be surprising why. But we cannot reap their benefits without doing our end of the bargain of course. We need to put in our fair share of work.
Now you see, commercial property auctions are far beyond the usual real estate trading platform where one finds an asset and then pays for the stipulated price to garner ownership. Auctions are more competitive in nature and they require a few additional tasks prior. In the event that you plan on attending one in the near future, here are 5 things to never do.
- Forget to arrange financing ahead of time. – An important thing to remember about auctions is that they have a strict and often short payment period, often with a down payment required on the day itself from the winning bidder with the rest of the balance payable within 28 days. Since financial resources of income and credit variations take time then one must arrange for them early on so they become readily available.
- Bid beyond limit and capacity. – Before even stepping foot into the auction haul, one has to strictly establish a bid limit. This should be the maximum price by which one will offer for a particular property. As to the exact digit, this depends on one’s financial capacity and the current market value of the asset.
- Share critical information with others. – Being too transparent about the assets we like and how much we’re willing to go for them can be used against us. That and the fact that raising others’ curiosity creates competition. We want lesser of that in commercial property auctions.
- Fail to do adequate research. – A lot of pre-purchase work goes into these transactions. Of course, one has to do background checks on the assets as well as their sellers and the auction’s organizers.
- Let emotions run amok. – Commercial property auctions can easily get heated in the sense that participants may let their hearts rule over their head. That’s not always a bad thing but in these platforms they are because it may constitute to a wrong purchase or even an overpriced asset. Both of which, we don’t want.