Buying at Auction
Auction is a different method of marketing a property that’s for sale. When purchasing real estate through conventional means, the terms and conditions are negotiated back and forth between the buyers and sellers. At auction, the terms and conditions are set and the only unknown is the price. This allows you to do all your due diligence prior to the auction and have an estimated price of what you wish to bid.
Auction Day Tips
RES will have information available on the property and be ready to answer your questions regarding the property or the auction process. The successful bidder will be required to sign the real estate purchase agreement and addendums and deposit the pre-determined earnest money. Auction advertising will specify the earnest money required for the day of the auction.
Title insurance assures you a clean, clear, marketable title to the purchased property. Title insurance will be offered on the property. The cost of the title insurance, is in most cases, shared between the buyer and the seller.
The real estate purchase agreement will usually call for the closing on or before 30 days following the auction. Customarily, the closing cost in most instances will be shared between the buyer and the seller. When marketable title is obtained and both parties are prepared to close, we often accommodate the buyer with an earlier closing. For most parties, time is of the essence for both the buyer and the seller and our services cater to the needs of both parties.
Keys and possession will be given at the time of closing, subject to existing lease or rental agreements, if any.
Taxes, Leases, and Rents
All previous years taxes will be paid to or at closing by the seller. Current year taxes, leases, and rents will be prorated to the day of closing.
Absolute Auctions vs. Seller Confirmation
Seller Confirmation: A seller confirmation auction is when the seller is able to set a minimum amount that the property must bring the day of the auction. If it does not meet the seller’s expectations they have the right to decline the offer on auction day.
Absolute Auctions: An absolute auction is when the seller is willing to take any offer on the day of the auction regardless of price.
Properties sell “As-is” in present condition on the day of the auction. All inspections must be done prior to bidding on the property. Information given is from sources deemed reliable but NOT guaranteed by the seller(s) or the Realtor(s)/Auctioneer(s). Announcements made the day of the auction shall take precedence over anything previously stated or printed.
The 30 days leading up to the auction is the time for you to get questions answered, attend open houses of the homes you are interested in, and determine what you can afford to spend. The actual auction is simply the time to offer the price you are willing to pay for those properties.
Auctions go fast
The auction itself moves fast. First time attendees are usually surprised to learn that the sale they are attending is over within a few minutes. In many cases, if the auction is for a single home with nothing else to be sold, the entire process lasts less than 15 minutes. So, don’t be late!
On auction day, prospective buyers register for a bidder number by showing a valid driver’s license and filling out some simple information. The registration period usually begins 1-2 hours prior to the scheduled auction time. There is no fee to register at the auction and high bidders may use cash or personal checks for down payment. You can also get all last minute questions answered and tour the home one final time, if you wish.
Before Bidding Begins
The auction begins promptly at the appointed time with opening remarks summarizing, for the record, the terms of sale, the methods of bidding, and any last minute changes or disclosures. These comments usually take only a few minutes, concluding with the auctioneer answering any final questions. Then the bidding is ready to begin.
Available at some auctions, if there is more than one property or parcel being offered, the “Buyer’s Choice” method is often used. In a “Buyer’s Choice” sale, items will be numbered or lettered for identification purposes. The number or letter will not relate in any way to when the property will be sold. Instead, each time the auctioneer says “sold”, the person with the high bid will choose which parcel(s) or property(s) they want to purchase by announcing the number(s) or letter(s) describing that property(s) or parcel(s). The high bidder can take as many parcels or properties as they want from those that remain unsold, and in any order or combination. His or her high bid is simply multiplied by the number of properties or parcels they have chosen at that time. Once chosen by a high bidder, and unless otherwise announced, that property is “sold” and no longer available. It is therefore very important that bidders realize if they do not have the high bid, the property or properties that want could be chosen (sold) to the high bidder and will no longer be available. Sometimes the high bidder will choose many properties at once, and in some sales, choose every property available, therefore bringing the auction to a close. “Buyer’s Choice” allows buyers, not the auction company or seller, to determine how, when, and what price they will purchase property.