Auctioning property is a relatively new strategy in Canada, but one that is gaining popularity with property investors keen on picking up a deal.

Often real estate brokers approach auctioneers with a listing because the property has been on the market for some time, or sellers contact an auctioneer because they are looking to offload the property quickly.

It can be an intense situation, but there are rewards for buyers that keep their cool. Here are some inside tips to help you get a good price, without getting over your head.

  •     Due diligence: Find out what the average price is for properties in the area, what type of growth and development is occurring, and other fundamentals such as amenities, transportation, etc.  
  •     Keep emotion out of it: Auctions are exciting, but don’t be tempted to get caught up in a bidding war
  •     Know your budget: It’s important to be flexible during the bidding, but you should always bear your budget in mind, as well as what the average property in the area is going for
  •     Get pre-approved: Because sellers are looking to get rid of the property quickly, most don’t have time for conditional offers so it’s a good idea to have your financing and a deposit arranged prior to the event
  •     Get the inside scoop: Find out about auctions in advance by signing up to a buyer’s list. All you have to do is approach an auctioneer. E-mail notifications are sent out prior to the event and sometimes buyers approach the seller prior to the auction and the auction is cancelled.
  •     Ask why?: Find out why the seller is trying to get rid of the property quickly or the reason why it might have been sitting as a listing for so long prior to the auction. Sometimes properties look quite run-down but they don’t actually need a lot of work. Find out what’s involved for a reno – the costs and the time it would take to flip
  •     Get familiar: Know the terms and conditions of the auction.

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