Participating in an auction can be an exciting experience. Through winning bidding activities, you can take your competitive side to your advantage to purchase the asset of your dreams—whether it be an artwork, jewelry, car, or home.
However, bidding in an auction needs careful preparation. It’d help if you’ll do your homework before deciding how much you’re willing to pay for an item, as with other undertakings. You’re bound to commit costly mistakes without research instead of taking home a valuable commodity at a bargain price.
If you’ve never participated in an auction before, read the entirety of this post to learn the most important considerations before bidding.
Ask For An Updated Catalogue
Whether online or offline, always find time to check the catalogs, so you’ll know all the items that are up for grabs. Whether big or small, auction houses, such as Clars Auction Gallery, will try to attract interested bidders by showing a catalog. While you have the option to pay for a printed copy, you may also view the online list without costs or if you’re a member. An electronic catalog may be better in some cases as it could be more updated than the printed catalog.
Once you’ve got an updated copy, mark the items or lot you’re interested in. Read the fine print, go through all the details, and determine whether there are item flaws and other conditions that may put you at a disadvantage.
Do Your Homework
Like doing a fundraising event, auction houses highlight all the items up for bidding, indicating that you’re getting the best deal. Comparing the auction offer to other offers is one of the best ways to ensure that you should bid on an item. Suppose you can’t find the exact material; search for similar-priced items under different conditions.
This is important, especially in buying a property, as some auctions have specific issues that need professional intervention.
Seek Professional Help
Real estate transactions require high investments, and not going through every detail will cost you money. Before participating in a property auction, ask a lawyer to review the title for authenticity and potential issues.
A legal counsel can also help you determine risks as a potential buyer and analyze vendor liability in specific instances. A lawyer can provide you with a piece of sound advice moving forward.
If planning to purchase valuable pieces via online art auctions, ask whether personal viewing with an art professional can be arranged, so you’ll know that the work is authentic. With an expert, you may also determine the item’s actual condition and get insights into whether the auctioned item is priced low, reasonably, or higher than its appraised value.
Previews Are A Must
Participating in a bid requires you to inspect the item. While you may have had a good look at the article in the catalog, it’s still crucial to take time to see auctioned items personally. Conduct a thorough inspection before the auction starts, as you won’t have time to do that once the bidding begins.
A scheduled preview also allows you to ask questions about the product. Remember that not all items offered are in pristine condition. In some instances, these items may have been listed on the market for a long time until the owner decides to auction them. For these reasons, don’t be afraid to ask questions before bidding. An in-house specialist shall entertain your queries before the activity.
Set Your Maximum Bid
If you have a competitive streak, it’s easy to go overboard with the bidding process. Setting a budget cap is one of the most important considerations before bidding at an auction. Before engaging in a bidding war, be conscious of the price and the bidding increments. Once the ceiling has been reached, let the other party win.
Think about the bid price and potential repair costs for auctions involving high-value properties. If you let yourself get carried away, you’ll likely pay more for an asset that needs high costs to improve, setting you back thousands instead of saving.
In bidding for other types of valuable items, you’d have to assess the following elements before setting a maximum bid price:
- The item’s condition
- Buyer’s premium costs
- Applicable tax fees
- Handling, shipping, or transport fees
Most auction houses charge a buyer’s premium that can cost anywhere from 10% to 25%. It’d help to ask how much the company sets before bidding. As most auction houses prefer that you take charge of picking up and transporting your items, it’s helpful to know if they’re open to this arrangement.
The Bottom Line
Successfully bidding at an auction requires preparation. Before setting your price, choose the items you’re interested in, research on them, determine whether you need professional help, and check out the additional fees charged to the final bid price. Skipping any of these could put you at a disadvantageous position even before bidding.