Real estate auctions bring out investors, corporations buying real estate, and everyday people looking to secure themselves the best tax-sale properties. It’s highly competitive because these auctions are an excellent place to find bargains if you’re house hunting. The stakes are high, and the price is often driven up significantly in seconds.
If you intend to bid on Ontario real estate to win, here are some tips for Ontario real estate auctions to use.
Tip #1: Search Out Tax Sale Properties Online
Before the real estate auction begins, look online for tax sales properties. Each listing should have basic information about what you’re bidding on and provide you with a starting point for understanding what is out there. A tax-sale property can be an amazing investment in the right circumstances, but property duds exist.
Depending on your objective, you should never go into an auction without knowing what properties exist.
Tip #2: Understand How Real Estate Auctions Work
If you have never been to a real estate auction, you may want to go to your first as an observer to get to know the process. Do your research online beforehand. Understand what you need to show up with, how the auction works, and the rules for deposits, payments, and when you can claim your purchased real estate.
Tip #3: Look The Part And Be Confident
How you present yourself at an Ontario real estate auction matters. Others may be less inclined to bid against you if you look serious. It may sound a bit silly, but it looks intimidating, and it doesn’t hurt to make an effort to demonstrate that you are heavily invested in what you’re there to do. In addition, you improve your confidence in the process.
Tip #4: Have The Money Ready To Close The Deal
There is no waiting to pay. If you have the winning bid at an auction, in many cases, you must make payment in full. Ask before how payment can be accepted. Make arrangements to have the monies available.
This may require financing from a lender long before the auction and getting it written up in a money order or similar payment method.
Tip #5: Come Knowledgeable About The Property
Don’t go in blind into a real estate auction. Research ahead of time. Understand what property type you’re bidding on and invest the time to get some background. With tax sale properties, you are limited on what you can get done regarding an inspection.
Still, you can rule out other claims on the property and get some important data by reading through the public information available.
Tip #6: Ensure There Are No Liens Against The Home
Do a title search on any property you intend to bid on. They can tell you if there are any liens against the property. If there are liens and you become the new owner, those transfer to you and suddenly, the cost of your home increases.
Look for tax liens, contractor liens, a second mortgage, or anything else. Ensure a clear title to simplify your bidding.
Tip #7: There Is No Perfect Tax Sale Property
No Ontario real estate auction will give you the perfect problem-free home that doesn’t have a caveat attached. You may have a tenant already living there, a prior homeowner in a grace period who will pay off the amount owing, and/or internal or external property damage that requires fixing.
That said, sometimes, there are auction homes that have no issues whatsoever. They are rare.
Tip #8: Don’t Disclose Unnecessary Info To Others
Keep to yourself, and don’t inform other bidders about a property or how much you anticipate bidding. Auctioneers, sellers’ real estate agents, and others want to drive up bids.
Be careful who you speak to at an auction, and never disclose how much you are willing to bid or what your maximum budget is. If the wrong person hears, it could work to your disadvantage.
Tip #9: Restrict Bidding According To Your Budget
Everyone’s financial circumstances are different. Don’t abandon or ignore yours to bid higher than you’re comfortable with. You don’t know what you’re getting in full with a property auction until you inspect everything.
Knowing the risk, one must ensure they are not going out on a limb bidding above their means. If you can’t tolerate the risk at a certain point, cut bait and move on.
Tip #10: Understand Contract Conditions At An Auction
Unless otherwise specified, you buy a property as-is at an Ontario real estate auction. You can do very little after the fact if you don’t want the property. The seller is not legally responsible for repairing damages, fixing maintenance issues, or evicting anyone living there.
Having not done an inspection, if you discover foundation damage, large amounts of mould, plumbing issues, or an environmental spill on-site, it likely all falls on your shoulders to arrive at a solution.
