4 Tips For Buying Commercial Property At An Auction
Posted on: 10 February 2016
Some people mistakenly believe that auctions are only for purchasing residential properties. However, more people who are looking to invest in commercial property are turning to auctions. If you are planning to attend a commercial property auction, here are some tips to help you make a wise investment.
Know the Terms and Conditions
Before the auction is held, contact the auctioneer and obtain a copy of the terms and conditions associated with making a purchase. Thoroughly read the terms and ensure that you understand them. By studying the terms ahead of time, you know exactly what to expect when you purchase a property.
The day before the auction, contact the auctioneer to verify that the terms and conditions you received have not been changed. If so, you need to be fully aware of the changes.
Inspect the Property
You should never buy an investment property without first inspecting it. You need to visually observe the condition of the property so that you can determine if it is worth the risk or not.
If possible, obtain a survey and professional inspection of the property. If there is not enough time, contact the auctioneer and find out if the last inspection reports are available.
Some auctioneers conduct tours of the property in the days leading up to the auction. Attend one if possible. If you are unable to, contact the auctioneer and request an appointment to view the property.
Be Prepared to Pay
Before attending the auction, ensure that you have the funds available to pay for the property. The auctioneer might require that you provide a down payment the day of the auction.
It is not uncommon for auctioneers to expect the closing to occur within a short period of time following the auction. It is your responsibility to secure a line of credit or loan to pay for the property within the amount of time allowed following the auction. If you fail to close within the period outlined by the auctioneer, you could face financial consequences.
Set a Limit
Determine what amount you can reasonably pay for the property before attending. By setting the amount before attending, you can possibly avoid bidding outside of your budget. While bidding, it is important to focus on the financial side of it and not the emotional. Auctions are exciting and it is easy to get carried away while bidding.
Buying a commercial property is a good way to secure an investment, but it is important that you do everything you can to ensure that you are making a sound deal. Consider working with a realtor to thoroughly explore your options prior to the auction. To learn more, speak with a business like Realty Executives.
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