Over the last decade, virtual auctions and online auctioning platforms such us Auction Flippers have grown in popularity, making Michigan land auctions online significantly more accessible to buyers and sellers from all over the world. However, when it comes to winning an auction, you have to be better than everyone else in the room.
So if you have your eye on a land property in Michigan in an upcoming virtual auction, here are a few tips and strategies you should remember to win it.
1. Have an investment strategy before the auction
Do you want to buy and flip a house or buy, hold, and rent a house? Do you prefer a large number of low-cost homes or a smaller number of high-cost ones? Do you need properties that merely require touch-ups, or can you handle major repairs? Do you prefer to own and manage properties close to home or from afar?
These are some questions that you must ask yourself before going to an auction. Having a plan in place boosts your chances of not just winning the bids but also buying the specific properties you need to achieve your goals.
2. Do your homework
Even though you can do the online bidding without leaving your workstation, you should conduct as much research as possible before bidding.
The majority of auction sales are as-is, with no guarantees and no recourse if the property does not match your expectations.
Therefore, we recommend that you examine the property as extensively as possible, as well as the neighborhood and local housing market conditions. For this reason, you can ask yourself certain questions such as –
- Is the value of your home increasing or decreasing?
- What about the rental costs?
- What is the unemployment rate, as well as the demographic makeup of the area?
Always remember there is no such thing as too much knowledge.
3. Have your financing in place
Usually, cash or a cashier’s check is required for participating in many online auction properties.
Some offer to finance, but you’ll normally just have a few days to transfer the funds to the seller. In most cases, a deposit is required to partake in an auction, and if your bid is the winning bid, you would have to submit the deposit.
However, if you don’t have the funds to complete the transaction, you will lose the deposit money.
In short, when going for an auction, ensure you have your finances in place, and you can get the home without losing your deposit money.
4. Don’t Get Emotional While Bidding
One of the scariest moments of any auction is when you get caught up in the excitement of bidding.
It’s not nearly as much fun to get so caught up in a bidding war that you pay considerably more for an asset than it’s worth. However, successful auctioneers have the expertise to bid up to the proper price and the self-control to quit bidding when the price becomes too high.
So, never let your emotions make a bid on your behalf because even if you win the bidding after paying more than the worth of the property, you will be the one in the loss.
5. Watch the land bidding – especially at the end of the auction
The bid is never final until the gavel falls in an online auction, just like in a live auction (virtually, in this case).
Many seasoned bidders wait until the very last second (literally) to rush in and win the deal.
When someone comes in and enters a greater bid at the end of the auction, numerous online auction sites prolong the bidding session, giving you a chance to compete. However, if you truly want to win the property, you must stay online until the very end to keep your bid.
6. Use a Bidding Strategy
If you want to win an online land Auction, then you should place your bids according to one of these strategies-
1) Bid Nibbling
Bid nibbling, also known as nibble bidding, is a strategy in which you place a bid significantly higher than the initial price but below market value.
If you already know how much your item will sell for, starting higher will weed out inexperienced bidders and prevent a prolonged bidding battle that drives the ultimate price even higher.
Do your homework on the item’s market value ahead of time so you can set a price that is high enough to deter cheap purchasers but low enough to allow you to grow.
When it comes to online bidding, the biggest factor that will let you win is “timing”.
Many virtual auctions have a predetermined termination time. When that moment comes, the item is awarded to the person who placed the highest offer before the auction closed.
You can box out the competition and “snipe” the item right out of their hands if you wait until the last possible second and bid a few pennies higher than the previous highest offer. Of course, if you’re bidding at a live online auction, you can still utilize this method to let the bidding cool off and improve your chances of getting a better deal.
Squatting is a psychological bidding approach that communicates to buyers that you are serious about an item and will not give up without a fight.
If the rival believes you will not give up, they will be less inclined to outbid you after a certain point. Therefore, begin by bidding early and countering every subsequent proposal to establish your territory.
A useful tip to remember with this strategy is to counter bid with odd amounts instead of even ones, such as $531.50 instead of $530, to make your patterns less predictable and the competition more intense.
7. Consider Proxy Bidding
You can also consider proxy bidding if you don’t think you’ll be able to watch your bid.
With proxy bidding, you place your highest bid and then instruct your computer to continue bidding for you until you reach the highest bid. This ensures that even if you look away at the wrong time or become preoccupied, you will retain your position as the highest bidder.
8. Know Your Maximum Bid Before You Start
Set your maximum bid before you begin bidding. Ask yourself the highest price you are willing to pay or can afford for the given land?
It’s crucial to consider the value of the property you’re considering while deciding on your maximum bid. You shouldn’t set your maximum bid higher than the item’s actual value unless it’s something you truly desire for a specific reason.