Frequently Asked Questions
Q. What advantage is offered by selling real estate at auction instead of traditional methods?
A. In traditional sales methods, the seller must set a top price for their property, known as the list price. All negotiating goes down from that price. In an online auction, bidding begins at a lower price and continues to increase with competing bids, insuring that the final, winning bid is the highest.
Q. What are the advantages of buying real estate at auction?
A. Buying real estate at auction allows you to experience a quick purchase and closing, eliminates lengthy negotiations and assures that you pay market value.
Q. Why should I sell my property using the auction method?
A. For sellers, there are many advantages that are built into the auction process, but the number one reason is the speed of the marketing process. You are able to sell your property quickly, receive a fair market, no-contingency contract and usually close in reasonable time frame.
Q. How is the property marketed?
A. A unique detailed marketing plan is developed and presented to the seller for approval. Generally, the marketing plan includes signage on-site, targeted direct mail, local and regional print advertisements, email notifications, social media integration, our web site and other online marketing avenues, to name a few.
Q: What do the terms reserve and absolute mean?
A: An auction where the property is being sold with a reserve means that the property is being sold subject to seller confirmation. We try to make sure that the reserve is reasonable and that the seller is very motivated to sell at the high bid achieved, regardless of the reserve amount. When a property is being sold absolute, it will be sold to the highest bidder regardless of the price.
Q. Can a buyer make an offer prior to the auction?
A. Absolutely. We will submit the written offer to the Seller for consideration and contingent upon their final approval. In this case, we recommend that you make your best offer at this time.
Q: What happens once I have become the successful high bidder?
A: One of our representatives will contact you to obtain the bid deposit and complete the sales agreement.
Q. Is financing available?
A. Some auctions have financing available, while others do not. See the information listed in your specific auction catalog to determine this. If financing is required to complete a purchase, we suggest you arrange and pre-qualify with a lender prior to the auction date. Please note, that all of our contracts are cash contracts and are not subject to the availability or eligibility for financing.
Q: What is a buyer’s premium?
A: A buyer’s premium is a percentage paid by the buyer and added to the highest successful bid to determine the final contract price. If a premium is being utilized, it will be detailed in the auction catalog.
Q: Can I make an inspection of the property prior to the auction?
A: Yes. Typically, our properties have specific on-site inspection dates posted on the website and in marketing materials. We strongly encourage you to view the property, as you will be purchasing it “As Is, Where Is”.
Q: To whom do I talk to if I don’t understand the auction contract?
A: It is very important for auction buyers to be educated and informed regarding the auction process. Make sure all your questions and concerns are answered before you bid. The contract is available by contacting our office. Feel free to have your legal advisor review the contract prior to the auction date.
Q: Do I need to be represented by a real estate broker in order to buy at the auction?
A: No. We do encourage buyer-broker participation; however, it is not a requirement.
Q: Before closing, do I have to make any additional deposits other than my bid deposit?
A: No. The bid deposit is a non-refundable deposit, and it is usually an amount that we feel comfortable will assure the buyer will close. The bid deposit is held in escrow and is deducted from the total purchase price, equal to the bid amount plus the buyer’s premium.
Q. What if the property has already been listed or had a price reduction and did not sale?
A. Often, we find that the price is not the reason why a property isn’t selling. Generally it hasn’t been marketed effectively, and therefore, the property has experienced insufficient exposure. In other words, it has become stale. The auction process is the best way to revive interest and create urgency in the marketplace to obtain offers at current market value.