Today I'll give you a few tips on what to look out for when bidding on real estate at online auctions.

To start, I'm not going to read through all the materials that were sent to me, but I will point out a few interesting things that caught my eye and give you tips for the future. We've used online auctions to buy a lot of investment properties and here's what we learned along the way.

Tip #1: Read the fine print.

It's important to always read the fine print. For example, I noticed that your paperwork doesn't allow electronic signatures. This means you have to print out a proposal and sign it when you submit it. If you print out the paperwork with an electronic signature, your proposal will be rejected and you'll have to go through the process again, which takes time and energy.

Also, take the time to learn about all the eventualities associated with the property, such as inspections, financing, title, etc.

Tip No. 2 There is usually a homeowners meeting

This owner round is open to people who actually plan to live in the property. While this stage does come with some regulations, it's unlikely that someone will show up at your doorstep and verify that you actually live in the property. There are ways around this, but stay safe and play by the rules. How to get around this? Contact the property's agent and explain that you want to place a bid as soon as the property is released for the investor round. The agent knows all the rules and regulations and can place your bid as soon as this round is released. This way, you'll be the first to bid on the property without having to constantly check to see when it will be released to investors.

Tip #3: Remember that some properties have a minimum amount

The reserve price is the dollar amount the auction house, bank, or owner must achieve before they can sell the property. Reserve prices don't always make sense. You may see a property listed for $30,000, but the reserve price is $80,000. Why do they do this? They gather information from the market. They list it at a low price and see what bids come in. If they don't meet the reserve price, they take the listing down, lower the reserve price, and relist. Basically, they try to get the highest and best offer from the market. Don't be discouraged by this process, but be aware that they will take the listing down and relist with a lower reserve price.

Hope this was helpful!

As always, email us your real estate questions at [email protected] and we’ll answer them in an upcoming episode!

Learn more about the DeRosa Group at http://www.DeRosaGroup.com or at BiggerPockets.com – https://www.biggerpockets.com/renewsblog/author/mattfaircloth/
Matt and Liz, founders of the DeRosa Group, were recently guests on the BiggerPockets podcast for the second time.

Check it out: https://www.biggerpockets.com/renewsblog/bp-podcast-203-finding-deals-funding-contractors-mentors-matt-liz-faircloth/

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Learn more about DeRosa Group by watching our recommended videos:

How I bought an 18-unit apartment without paying any money out of pocket
https://www.youtube.com/watch?v=3dDRVGYI1wg&t=14s
How I turned a duplex into 20 units
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https://youtu.be/8DBtD1OcjKQ
How to buy an investment property if you get laid off
https://youtu.be/fWevXC9ZuZ8

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