Can I be sure of getting a fair price?

The only genuine measure of value of real estate is what someone else is willing to pay for it. An appraisal is merely an informed opinion. It is not an offer to buy. The real measure of value of real estate, at any given time, is what it will bring under competitive bidding from informed and motivated buyers

 

Must I accept the high bid at an auction?

Not necessarily. The auction can be structured in a way that gives the seller the right to accept, counter, or reject any bid without having to disclose the minimum acceptable price prior to offering at auction. Sellers will want to carefully select the type of auction that best suits their needs.

 

What are the expenses related to an auction?

In general, auction expenses include the auctioneer’s fee, marketing and advertising costs, and sometimes co-brokerage commissions. The fee varies depending on the type of property and the type of market you need to reach. Typically, the auctioneer charges a commission as a percentage of the sale price. This commission is negotiable. In addition, marketing and advertising costs are usually paid by the seller and are payable upon signing the auction contract. A complete marketing proposal is provided for the seller’s approval prior to signing. The seller pays a co-brokerage commission, either a flat fee or percentage of the sale price, only if the highest bidder is represented by a registered broker.

 

Do I need to register to attend a real estate auction?

Generally, you will be welcome as a spectator at any auction, but it is wise to contact the auction company conducting the auction to make sure.

 

Do I need to register to bid at a real estate auction?

Yes. In order to bid at an auction, you must register. To do this, you will be required to show evidence of your ability to bid through a cashier’s check, certified check or money order for the required amount as well as produce a form of personal identification. Check the specific instructions provided in any Bidder’s Information Package.

 

What do I need to know before bidding?

Do your homework! Do a thorough analysis of the actual property, the neighborhood, and the indebtedness (if applicable). If you are the successful bidder, you will be purchasing the property based only on clear title – meaning there are no warranties or guarantees as to the property condition.

 

– Personally inspect the property to determine its condition.

– Talk to tenants or neighborhood property owners.

– Check property records for every available bit of data.

– Find out what is included in the sale.

– Obtain a pre-approved mortgage or line of credit – the purchase and sale agreement often does not include any financing contingency.

– Review all auction documents – you should know exactly what you are bidding on and under what terms and conditions you will be signing an agreement.

– Obtain professional advice from an attorney, auctioneer, real estate broker, or appraiser.

Attend several real estate auctions before you become an active bidder. This will help you familiarize yourself with the auction environment and give you a better understanding of the bidding strategy and the auction process.

 

When can I see the property?

Open houses are usually held approximately two to four weeks prior to the auction date. During the open houses, prospective bidders are encouraged to verify the description, number of rooms, square footage, and property dimensions.

 

In what condition is the property?

All properties will differ as to their condition and are sold in “as is – where is” condition without warranty or guarantee of any kind (other than clear title). Bidders are strongly encouraged to inspect the property prior to the sale.

 

How many properties can I buy?

You may purchase as many properties as you wish, but you must have a separate cashier’s check, certified check or money order for each one. For investors, financing may be limited to a certain number of purchases. You should consult the Bidder’s Information Package for specific terms.