Course · Lesson 6 of 8
Your maximum bid
Set one number at your desk, and stop there.
Bidding is the worst time to do arithmetic. Decide at your desk, and write the number down.
Maximum bid = (A × B − C − D) ÷ 1.007
- A: a value you can defend, from Lesson 5.
- B: your spend limit. 0.50 means you'll spend half of A.
- C: recording fees.
- D: title and every other cost.
The ÷ 1.007 covers documentary stamps at $0.70 per $100 of the bid, the rate on my Volusia sheet. Confirm the rate and fees with your clerk.
Worked example
$20,000 × 0.50 − $10 − $1,500 = $8,490. Divide by 1.007, and your maximum is about $8,431.
What D has to hold
Put in everything you'd pay between the auction and a sale: title work, taxes while you hold, insurance, mowing, and any government lien you found in Lesson 4. Forgetting these doesn't make them smaller.
Choosing B
B is your margin for being wrong. The less you know about a parcel, the lower it should be. In Volusia, the free Bid Desk runs this for you with real lot sales.
Do this now
Work out your maximum for your parcel on paper. Keep that paper beside you on sale day.
Check yourself
What does the ÷ 1.007 do?
It leaves room for documentary stamps at $0.70 per $100 of the bid.
What should you do when bidding passes your maximum?
Stop. There will be another parcel.