How to Make a Profit at a Real Estate Auction

Real estate auctions aren't just for distressed properties. Many homeowners are selling their homes and real estate at auction and realizing a profit. Real estate auctions generate a lot of interest and buzz, because there is only one chance and one day to buy it. Here are some tips to help you make a profit at a real estate auction.

Instructions

Difficulty: Moderate

1. Get your real estate in good condition to maximize profits. Fix or repair your home if possible, paint the rooms and generally spruce it up. Landscape outdoors and pay special attention to the curb appeal of your home. Small repairs and sprucing up your home will bring in more money than they will cost you.
2. Compare your home or real estate to others that are similar in your area. Look at the asking prices and sales prices. Get a good idea of the value of your property well before the action.
3. Meet with an experienced and successful auctioneer. Ask for references and attend one of his auctions before signing any contract with him. Make note of his advertising and signs. When you arrive at the auction, note how many people are in attendance, how much buzz there is, how organized the auction is and how successful it is in the end.
4. Hire the best auctioneer you can find, even if his percentage is more than other auctioneers. The most successful auctioneers will bring scores of people to the auction through advertising and will create an air of excitement for the buyers. The auctioneer can even create a buzz with his own attitude. The more interest and buzz created, the more chance you have of a "bidding war" and higher profits.
5. Set a "reserve" price with the auctioneer when you hire him. A reserve price is a price you will not go below. For example, you may set a reserve price of 150,000 even though you want to get 200,000 for the real estate. The reserve price is the least amount of money you would take. If you set a reserve, you will get at least the minimum profit you want.