What should I look for when I attend a real estate auction?
After checking to be sure a professionally accredited auctioneer is conducting the sale, get as much detailed information as you possibly can and attend an Open House to preview the property.
Do I need to register to attend a real estate auction?
If you plan to be a bidder, you must register, however, you may attend any public auction as a spectator. Registration is easy - simply arrive at the auction site at least 30 minutes prior to the start of the auction, and obtain a bidder number.
What are the Terms and Conditions of the sale?
The Terms and Conditions govern the sale. They include information such as the required deposit amount, when the sale of the property will close, and other key facts. You should familiarize yourself with these prior to the auction. Summaries of the Terms and Conditions are available within the property listing, or on the printed brochure. You should note that at an auction sale, any announcements made by the auctioneer on the day of sale take precedence over previously published or verbally conveyed terms and conditions. So, be attentive at the sale!
Is the condition of the property warranted?
No. The condition of properties varies. Properties are usually sold “as is-where is” without a warranty or guarantee of any kind other than a clear title. Coldwell Banker Glennon-Weber Auction Division encourages all bidders to inspect the property prior to the sale.
Is the auction method successful?
Yes and its popularity is growing annually. In 1990 $10 billion worth of real estate was sold at auction. In 2004 that figure had jumped to almost $60 billion. Why the growth? Smart buyers now recognize that market-driven sale by auction is a cost-effective means to efficiently buy properties.
What do I need to know before bidding?
Before you bid you should inspect the property to determine its conditions. You’ll want to check property records for relevant information and find out what is included in the sale. You also want to obtain a pre-approved mortgage or line of credit — the purchase and sale agreement will not include any financing contingency. You’ll also want to review all auction documents including the property information package, and if necessary, obtain professional advice.
What type of property is sold at auction?
All types of properties — Residential, Commercial, Land & Investment — are effectively marketed and sold through the auction method.
I understand there are several types of auction. What are they?
There are two types of auctions: absolute and reserve. Absolute auctions always draw the largest crowds. In an absolute auction, the seller agrees to sell the property at the final bid. In a reserve auction a non-published minimum selling price is established and the highest bid or offer is presented for immediate seller confirmation.
Doesn’t an auction suggest that the property is undesirable?
Absolutely not. Most auctions today don’t result from distress situations, but rather are the result of a seller choosing a cost-effective, accelerated method to sell their property - rather than months or maybe years it takes to sell by other means.
How should I prepare to bid at a real estate auction?
The primary difference between buying real estate at auction versus buying real estate conventionally is that at auction, you do your property evaluations and inspections, including any lead-based paint inspections, and prepare your financing prior to coming to the auction. If you have done your homework in advance, evaluated what the property is worth to you, and have arranged for the financing, buying real estate at auction will be a fun and streamlined process. By doing your work beforehand, you can bid with confidence. You will know what you are getting for your money, from where you are getting your financing, and when you will close your transaction (generally 30 after the auction). By participating in the auction process, you can feel confident that you are getting the property at a fair price because you need only bid one increment over the next highest bidder to win. The fact that all bidders are playing by the same set of rules avoids losing real estate over contingencies or seller concessions.
What do I need to do on auction day?
It is advisable that you arrive at the auction site at least 30 minutes prior to the time of the auction. By doing this, you will have plenty of time to look at the property, ask questions, review materials and register. A real estate auction can be over in a matter of minutes so don't be late! Although there is no obligation to bid at an auction, all prospective buyers must register in order to bid. To register, you will need to provide evidence that you have the earnest money deposit required to bid. A valid driver's license or other acceptable form of identification is also required. The earnest money deposit must be in the form of cash, certified check or bank/cashier's check. See the Terms and Conditions of each sale to obtain the specifics as to the deposit requirements for the property of your interest.
How do I bid at an auction?
In order to bid at an auction, you need to attract the auctioneer's attention. You can hold up your bidder card, you can wave, or you can shout out "Yes". Many times there will be a bid assistant circulating among the bidders who can also convey your bid to the auctioneer on your behalf. Conversely, if you want to take yourself out of the bidding, just shake your head no when the auctioneer looks at you, or answer "No". Pretty easy stuff. If you are ever unsure whether your bid is the high bid at any given time, feel free to ask a bid assistant or the auctioneer to confirm this. The auctioneer wants to provide you every opportunity
to place your bid and will not allow you to bid against yourself.
