14 May 2008
Real Estate Foreclosure Auction Sale Process
What will I need to bring to the Auction?
For Auction sales, you will need to bring a Cashier’s check made out to yourself. Normally this Check is for 10% of the minimum sale price set by the Auction company.
What happens if I am the successful bidder?
Immediately after the event, you will pay a 10% non-refundable deposit and sign a contingency-free contract agreeing to close within 30 days. As you bid, remember that the actual sale price may include a buyer’s premium that is added to the high bid.
Can I make the contract contingent upon financing or inspections?
No, the auction contract is contingency-free. For this reason, it is very important that you finish your property evaluation and arrange any needed financing before the auction.
Will I be able to understand what’s going on during the auction?
You can chose to visit an Auction as a non-bidder to observe and learn the process.
What if I want to be represented by a broker?
If you wish to be represented by a broker, he or she must complete the required broker registration form. This form is available from most Auction companies. In most cases, the broker must register with the Auction company 48 hours prior to the auction to qualify for a commission.
What are the advantages of an Auction as opposed to an ordinary listing?
Practically all sellers desire to get their property sold more quickly. Beyond that, however, we hear numerous reasons, including these:
• To eliminate ongoing costs of ownership.
• To establish a market price on a property that has few comparables.
• To divide assets in the event of a death, divorce or other change.
• To free funds for other purposes, such as the purchase of another property.
What’s the difference between an absolute and a reserved auction?
In an absolute auction, the property sells to the highest bidder regardless of price. This type auction tends to get the best results, because it attracts the largest number of bidders. This type of auction is sometimes referred to as an “unreserved” auction.
In a reserve auction, the seller retains the right not to convey the property if the high bid is deemed unreasonably low. The reserve is usually not communicated. (Note: This type of sale is sometimes referred to as “subject to seller confirmation.”)
If somebody didn’t make an offer on a property when it was offered through an ordinary listing, why would he or she bid at auction?
The most common reason is that they never knew about the property before. Another common reason is that the property may have had an unrealistically high asking price. When an asking price is out of line with the true market value of a property, many buyers feel that there is no point in making a lower offer. With an auction, there is no asking price, so we don’t have that problem.
