How to buy at Real Estate Auctions
BIDDING AND BUYING WITH CONFIDENCE!!
There are many benefits to purchase real estate at auctions, however, every auction company has their own rules and regulations and every single auction is unique for itself. Therefore, like in any other transaction, due diligence is required. The following is a list of the benefits to the buyer at an auction from the National Association of Realtors as well as a Guide to prepare and bid at an auction. If you follow these steps, you should be able to bid with confidence and maybe become the winning bidder for the property.
BENEFITS TO THE BUYER (according to the National Association of Realtors)
* Smart investments are made as properties are usually purchased at fair market value through competitive bidding
* The buyer knows the seller is committed to sell
* In multi-property auctions the buyer sees many offerings in the same place at the same time
* Buyers determine the purchase price
* Auctions eliminate long negotiation periods
* Auctions reduce time to purchase property
* Purchasing and closing dates are known
* Buyers know they are competing fairly and on the same terms as all other buyers
* Buyers receive comprehensive information on property via due diligence packet
PREPARING FOR AN AUCTION
Attend an auction! Check the local newspapers or join our mailing list for auctions in your area. Attend and observe one or more auctions and familiarize yourself with the process before you attend an auction as a bidder. Auction companies differ in the amount of "due diligence" information they provide and how they conduct an auction. The auction process happens quickly, so knowing what to expect is important, when you decide to buy. If you have questions about what you saw, email or call us.
Prequalify yourself for financing. Real Estate Auctions usually do not have financing contingency clauses and therefore you are obligated to close if you are the highest bidder. Unless you are a cash buyer, increase your comfort level by getting approved for financing before you decide on a property to buy. Call your lender in time to get approved. It is best to know what you can afford to pay for the property before you bid. Now you will be able to bid with confidence!
Inspect the property, Remember, at auction, most of the time you are buying "as is", with Attendance at an "open house" will allow you or your representative to see first hand what you are bidding on and help determine value and desirability. This will help you to bid with confidence.
Plan your bid strategy Determine your bid limit after examination of the property and all available information. Plan to compete. Most bidders will be thinking in the same price range. The one who bids that number first, wins the day.
Register to bid On auction day, it is to your advantage to arrive at the auction site 1 hour before the auction. By doing so, you will have more time to consult with on-site staff who are prepared to assist you with your last minute questions regarding the property and the auction process. Upon completion of registration you will receive a Bidders Package containing and the general terms of sale.
Bring required deposit, if you are NOT known to the Auctioneer. You will be required to show proof of your deposit in order to register at the auction. You should have a blank personal check with you. When you are the successful high bidder at the auction, you will be required to affirm your bid with a signature on the Purchase and Sales Contract and provide an executed check for the required deposit to the auction company. Deposit requirements and amounts are clearly described in the "TERMS" section.
Prepare for "Q&A" Prior to the start of bidding, we will conduct a Question and Answer (Q&A) session. This is your opportunity to ask any last minute questions before the auction begins. You should come to the auction prepared to ask your questions. If you arrive early enough we suggest you ask your questions prior to the auction time. The auctioneer may ask you to repeat your question during the Q&A, if he believes it to be of interest to all bidders. Our job is to raise comfort levels of all bidders with the auction process, the property we are selling and the auction company. The Q&A is important to the success of these goals. Only registered bidders will be allowed to ask questions at this session.
Bid Aggressively Until the "hammer falls" or you have reached your limit you should compete aggressively. There can be only one winning bidder for the property. You cannot buy at your price unless you BID your price. GOOD LUCK WITH YOUR BIDS!
Absentee Bids, If you are unable to attend the auction, you have the option to leave a mail bid or send somebody else to bid for you. You are required to register with Mike Price at least 48 hrs. before the auction and deposit an Absentee Bidders Earnest Money Check which is fully refundable if you are not the highest bidder. Please contact Mike Price for the details of Absentee Bids for the specific auction you are interested in.
Mike Price of RE/MAX Associates Real Estate are prepared to supply you with information, over the telephone cell (479)263-9400 or email mgprice@yahoo.com, concerning specific properties as well as the auction process itself.
