2 helpful precautions when bidding at an auction

Believe it or not, there's a right way to auction. Avoid making a move you'll regret. Instead of getting caught up in the moment, make sure you're prepared with these two helpful tips.

2 helpful precautions when bidding at an auction

Set your limit ahead of time

Before bidding begins on an item—whether it's an in-person or online auction—write down on a piece of paper how much you're willing to spend, then add an extra 10 percent.

Cut your losses

  • During a heated exchange of bids, most people lose their ability to stick to a reasonable price.
  • Once you reach your limit, and then the added wiggle room you've allowed yourself, stop bidding.
  • Don't go a dime higher. Let the winning bidder realize with dismay that she's just paid too much on an item, and save your money to win on an auction bid another day.

Avoid publications promising big savings at auctions

Government auctions that sell property such as seized vehicles and foreclosed homes can be places to find decent bargains. However, pay no heed to advertisements that want to sell you guides on finding auctions that sell this type of property for next to nothing.

Don't get swindled

  • For starters, you may be charged for more guides than you really want, according to the Federal Trade Commission. At around $50 a pop, these get expensive quickly.
  • Another reason to skip these is that they only provide information that you could easily find on your own.
  • Finally, they tend to exaggerate the deals you'll encounter.

Choose your sources wisely

  • Don't get your hopes up too much about the savings you'll find at these auctions. Plenty of people know about them and show up to bid on worthy sales.
  • If indeed you find a car for a few hundred dollars, or a house for a few thousand, they're going to be very questionable in value.
  • Instead of purchasing one of these guides, visit your local city hall, which may have information about upcoming auctions. In Canada, the Public Works and Government Services Canada website is a good one to access at www.pwgsc.gc.ca. It provides a list of Crown Assets that are on the auction block; to view featured items go to crownassets.pwgsc.gc.ca.
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