Auction Opportunities

Market Report 4: Auction Opportunities 19/02/2008 , by Phil Jones
		Audio File
		Auctions have just become a real estate buyers secret weapon. In a booming market where the ratio of buyers exceeds sellers auctions should be avoided but now the tables are turned! Buyers are scarce and that means we now have the upper hand at auctions, especially mortgagee auctions as I alk about today. Now there are several ways to take advantage of the current market and auctions, here are a few: 1/ Follow up on No Sales More property than ever is NOT SELLING AT AUCTIONS which gives investors massive negotiating power to pick up bargains after an auction has failed. You virtually have no competition and some very desperate sellers who have just spent a lot of marketing money on a property that didn't sell. 2/ Mortgagee Auctions Two things work in your favour here, mortgagee auctions are on the increase and buyers for them are on the decrease. This means you are likely to be able to cherry pick some VERY HOT bargains on some very good properties that no one else wants. Remember most mum and dad home buyers DO NOT go to a Mortgagee Auction to buy their next family home. 3/ Auction Terms Before an Auction starts you can register your buying terms with the auctioneer. This is rarely done in a hot market but in a cold market all the power rests with the buyer! You could for instance ask for a 90 day settlement if you win the auction or request access to improve the property or show prospective tenants through before you settle the purchase. In the US, here is what is happening with Mortgagee Auctions, its beautiful! Can you see a bargain or two like: $1000 Starting Bid for a $321,300 home $79,000 Starting Bid for a $525,300 home Now I'm not suggesting your are going to see these sort of numbers in New Zealand but what it does illustrate is the opportunity Mortgagee Auctions offer in a flat market. An example of this was brought home to me this week when I spoke to one of my students from New Zealand who had just signed a lease option deal this week that gave him: $90,000 in Equity Profit and $330 a week in positive cashflow. You have to laugh that at the exact time when some investors say they cant make money other investors are doing deals like this. Deals that sit in the market right under everyones nose! Pic 1: Corinna with Charles Hoskowicz from Keller Williams Realty in San Diego In the last couple of weeks Corinna and I have spent a lot of time with Real Estate Agents, Mortgage Brokers and property industry experts in the USA for three reasons: 1/ The NZ Market can learn a lot from the US 2/ Some of the products, services and solutions here are very useful for Richmastery customers in New Zealand 3/ We are looking to buy here later in the year