Sunday 20 April 2008

Distressed Sales at Property Auctions

Auctions are the order of the day. Where ever you go in the world people are very keen to find properties using them. Are they correct in thinking that they'll pick up some wonderful bargains at them? Sometimes, but it's an awful lot more work than you might initially have entertained.

If you're prepared to put in the work and suffer the frustration involved, however, you might well unearth a gem. Be careful though, the success of auctions is based on people getting competitive and 'not wanting to let that property go for the sake of a few thousand'. And it works. You can see people getting caught up in the whole process and paying way more for properties than they are actually worth.

In this time of economic instability there are property auctions running across the world from Spain and the UK to the US. They are relatively new to the Spanish market, you can see an example here, but in the UK and US they are pretty commonplace. One company specialising in such sales in the UK is Pugh & Co. There is some info on Florida auctions here.

In Ireland we're more used to seeing auctions when people wish to sell 'unique' properties. At one stage a few years ago every property in Ireland seemed to have been 'unique' as most of them seemed to be selling at auction. Not now though, this fad seems to have passed and we're back to having only truly 'unique' properties in our auction rooms, usually sold individually.

In the UK and US the selling of hundreds, if not thousands, of lots at a single auction is far more common-place. Throw in a property slump and the numbers of properties involved rise significantly. That is where we're at today.

There is currently a lot of interest in the Florida market, our mother-site,, calculates that it is now top of our search listings, beating France & the UK to the top spot. Most of the interest seems to be in what is termed 'distressed sales', basically people who are selling because they either can't afford to complete a purchase or can't afford to keep up mortgage payments on a property they've already bought.

As they say on Hill Street Blues "Let's be careful out there", just because a property is being sold cheap at an auction does not mean that it is worth the price or that it is value for money. By its very nature much of the property that comes to auction is rubbish. Rich people with high spec properties are far seldom found in need of the cash to pay their mortgages than poor folk, so it is inevitably property belong the latter category that is normally found at auction. Much of it is poorly built, in poor locations and comes with a lot of baggage. If you're going to buy property at auction you need to do an awful lot of ground work to ensure that what you are bidding on is actually worth what you intend to pay for it.

You will often find that properties that are actually worth investing in achieve unrealistic prices at auction because professional investors will know that they are worth money and there will be a lot of interest in them. The professional investors stop bidding once a realistic price has been passed and unfortunate 'mug' investors get caught up in the whole competitive auction process and end up paying over the odds for the property.

For a listing of property in Florida click here.

For a listing of Florida Estate Agents click here.

For a listing of Exhibitions showcasing Florida Property click here.

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