What is a real estate Auction?
A Real Estate Auction is method of buying and selling real estate which simplifies the purchasing process through the medium of an auctioneer.
What are the benefits of a real estate Auction?
The Real Estate Auction is definitely a win-win proposition for everyone involved. The seller disposes of properties quickly and efficiently, thereby saving long-term carrying costs such as interest, real estate taxes and maintenance. For the buyer this can mean a smart investment, since properties are usually purchased at fair market value through competitive bidding. Because the auction sale is conducted in an open forum, both motivated buyers and motivated sellers have the assurance of watching the property's true market value emerge as the bidding process progresses. For both the buyer and seller, fair market values for the property prevail.
If the property doesn't sell at auction is it possible to still market it?
Yes. The Real Estate Auction marketing method has exposed the property to a large segment of the buying public. Many times a buyer who wants the property but is uncomfortable with the auction process will make an offer after the auction date. In other instances offers to buy the property prior to the auction date are made and accepted. Auction pressure forces buyers to act.
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.
What factors determine the success at an auction?
The desirability of the property being sold. This includes location, condition, and surrounding properties.
An aggressive marketing and advertising plan geared to prospective purchasers.
Realistic expectations on the part of the seller.
Selecting the type of auction that best suits the property and the Sellers needs.
Conducting the auction in a professional manner and following up through closing.
Undertaking due diligence ahead of time so buyers are knowledgeable and the only issue that remains is price.
How long does it take to market the property, have the auction, and close the sale?
The timeframe varies depending upon the type of property auctioned. Generally,the process takes 30 to 60 days from listing to closing.
What are the various methods of auctioning that a seller may choose from?
Two general types of auctions are used for real estate. The choice depends on the disposition of the seller, not the nature of the property up for auction.
First, is the absolute auction or auction with our reservation. In this type of auction the seller is legally required to sell the property at the auction regardless of the final high bid price. The main advantage of an absolute auction is that it generates maximum response from the marketplace. Since a sale is guaranteed regardless of the price, buyer excitement and participation are heightened. As a result, the price of the real estate can be maximized. That's the paradox with auctions; the lure of low prices or possible low prices creates the likelihood of high prices. The main disadvantage is the lack of a safety net for the seller. The real estate is sold regardless of the owner's price requirements.
Second, is the auction with reservation. The seller reserves the right to reject the final high bid price. The chief advantage of this type auction is that the seller is not obligated to accept a price that's entirely unacceptable. The main drawback is obvious. Many prospective buyers don't want to invest the time and expense investigating property when they have no certainty they'll get the property even if they are the high bidder. The high bid is reduced to an offer, not a sale.
Where can I get information on the properties for sale?
The auction sale brochure or flyer will list all the addresses and a general description of the property, as well as, the open house schedule. Additional information, which includes tax and assessment information, lease information, terms of sale, the real estate sales contract and financing terms, are printed in the Bidder's Information Package available at any open house.
Do I need to register?
Yes, in order to bid at the auction you must register. To do this, you will be required to show evidence of a cashier's check, certified check, or money order for the required amount, as well as a form of personal identification. However, you hold on to your check until your bid has been accepted (Please make all checks payable to yourself.)
How do I bid?
After registering at the auction, you will receive a numbered bidder's card. This card should be visible while you are bidding, or our auctioneer and staff may not take your bid. Our Bid Assistants watch for bidders and will call in your bid when you tell them to do so.
Is there a starting bid?
The auctioneer invites an opening bid for each property at a price level low enough to stimulate competitive bidding while high enough to speed the sale along. It is more art than science.
How will I know if my bid is accepted or rejected?
The seller will accept or reject the bid on the spot. High bids in absolute sales are accepted automatically regardless of price.
Will I be able to understand the auctioneer?
Yes. Our auctioneers call the bids in a very easy to understand manner. They also conduct pre-auction seminars an hour or so before the auction to explain their calling technique, and make you more comfortable with the auction procedure. In addition, our Bid Assistants will assist you when you bid by getting the auctioneer's attention. Work with your Bid Assistant.
What if I am out of town on the day of the auction?
If you will not be attending the auction and would like someone to bid in your place, they must be authorized to represent you by having a power of attorney document, and meet all other registration requirements.
How do I Know which properties are being sold absolute?
The properties sold absolute are listed as absolute sales in the auction brochure. They usually are the first properties to be auctioned.
How are the properties chosen to be sold absolute?
The seller most often chooses the absolutes as a representative sampling of the properties being sold.
When can I see the property?
Open houses are held beginning approximately two 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.
Why is the property being auctioned?
The real estate auction provides an expeditious means for banks and owners to sell many properties in one or two days, saving thousands of dollars in holding costs.
Are there any liens, back taxes or delinquent assessments on the properties being auctioned? All properties sold will be guaranteed to be free and clear of liens by the Title Insurance Policy. Unpaid taxes and other proratable items will be prorated to the time of closing.
In what form is the earnest money deposit required?
Prospective buyers must bring a cashier's check, certified check or money order in order to bid. If you are the successful high bidder, this money will then be considered all or part of the earnest money deposit and is non refundable. NO PERSONAL CHECKS PLEASE.
Is additional earnest money deposit required?
Specific requirements for "additional earnest money deposits" vary for each auction. Please consult the Bidder's Information Package for details.
How do I get financing?
A local loan company usually provides financing to qualified bidders. Buyers are encouraged to pre-qualify for this by contacting the loan company. Names and numbers of the appropriate companies and their personnel are given in our action literature. As an alternative, buyers can obtain their own financing, or pay with cash.
What happens to my earnest money if I decide at a later date not to buy the property?
Your earnest money deposit will be forfeited if you fail to consummate the sale regardless of the reason. If the seller fails to close because of defective title, etc...you deposits will be refunded immediately.