Commercial property auctions are public sales that involve assets specifically designed and catered for business purposes. They are an accelerated marketing and competitive bidding process that requires participants to bid or propose with the property awarded to the person in the room with the highest offer.
Many sellers and brokers choose to sell in auctions for many reasons. For one, there are those who would want to immediately sell an asset. This is common among banks that have foreclosed properties and would want to liquidate them in as much as possible. There too are sellers who want to take advantage of the demand and competition in them especially during times when the market is slow.
- Know what you’re going up against. This will require you to do your homework. Research about the auction and the assets being offered in it. Prior to the event, a brochure, newsletter or catalogue will be sent across or made available for participants who make known of their intention to attend.
- Visit and survey the properties. Just because you’re bidding on it doesn’t mean you’re not entitled to visiting the asset ahead of time. You can and it is advisable that you do. It would even be best to get a chartered surveyor look into it. This way, you’ll be sure of the item you’re about to fight for.
- Be comfortable with auctions. No, we don’t mean wear your pajamas you silly. What we’re pointing at here is that you should be aware and knowledgeable enough about the processes, requirements and obligations attached to them. If you’re a first timer, it would be best to observe your way through your first auction.
- Stay incognito. Don’t reveal too much of yourself and your intentions otherwise they may be used against you. For instance, never be too giddy about a certain asset lest you want other bidders to take notice of the gem you discovered. The same is true for your spending limits. Sellers may opt to raise the bar higher and take advantage of your interest.
- Prepare your financing ahead of time. Just because you won the bid at commercial property auctions doesn’t mean that you get the last laugh. You’ll have to pay up an upfront cost and if your financing has not been prepared and made available beforehand, you can still lose to the next bidder in line.
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