Buying Real Estate at Auction
Are you in the market to purchase real estate?
Do you want to be treated fairly?
Are you tired of ongoing negotiations with unreasonable sellers?
Then buying at Auction is for you!
How do I buy at Auction?
- Call Tom Hall Auctions Inc. @ 610-799-0808 if you have any questions… we are here to help you.
- Attend the open house for the property that you are interested in and obtain a bidder’s information package.
The bidder’s information packet includes: Property Information, Terms and Conditions of Sale, a Sellers Disclosure Statement (if required), Lead Based Paint Disclosure (Pre-1978 properties). Feel free to bring a home inspector to check out anything you feel is necessary. You will be guaranteed a clear title from the seller if you are the successful bidder.
- What do I do auction day?
On auction day it’s best to arrive at the auction at least 30 minutes prior to the start of the auction. This will give you time to take another look at the property and ask any questions you may have and plenty of time to register to bid. To register to bid you will need to provide a proper form of identification.
- What do I need to bid?
In the event you are the winning bidder you will be required to make a deposit (usually 5%-10% of the final bid price, check the terms for the property that you are interested in) by personal check or certified funds at the conclusion of the auction. You should also obtain a mortgage pre-approval since auctions are not contingent on financing.
- When is settlement?
You will typically have 30 to 45 days to close on the property (check individual auctions for settlement period). If you don’t close in this time frame, the deposit money could be non-refundable.
- How do I bid?
Auctions are a fun and easy way to buy just about everything imaginable. All you need to do is get the attention of the auctioneer by raising your hand when you want to bid.
- Does (“as-is) mean there is no need to disclose any known defects?
Though a property is sold (as-is) the Seller will offer a Sellers Disclosure to all parties, if required.
- Who can bid at the auction?
Our auctions are open to the public; everyone is invited to participate in the auction event. It’s fun and easy.
- Do I need to register?
Yes, you will be asked to register for a bidder number on auction day. To register you will need to provide proper identification.
- I bought the property now what?
Next, you would sign copies of the Agreement of Sale and make the required escrow deposit. It’s then the buyer’s responsibility to contact a Settlement Company or attorney of your choice for settlement.
- When and where does the closing take place?
Most settlements take place within 30-45 days after the auction. The closing is usually held at a local Settlement Company or an attorney’s office of the buyers choice.
- Is the closing different from any other real estate closing?
No, the closing is the same. The main difference between private treaty selling and auction is how the purchase price is achieved. Once the auction is over closing is in the customary manner.
- The buyers know the seller is serious about selling their property
- Buyers determine the purchase price through competitive bidding
- Auctions eliminate the long and tiresome negotiation process
- All terms and conditions of the sale are known in advanced
- Buyers do not have to worry about contingencies.
Types of Auctions
A property that is offered at absolute auction means that the property will absolutely sell to the high bidder regardless of the price. There is no minimum, and the seller cannot reject the highest bid at the auction.
Auction with Reserve
An Auction with reserve means that the property is being offered subject to the seller accepting or rejecting the high bid. By utilizing an auction with reserve the seller can be flexible in accepting or rejecting all bids. The main advantage to the seller in this type of auction is they are not obligated to accept a price other than one that is entirely acceptable to them.
Minimum Opening Bid Auction
In this type of auction a minimum selling price is established prior to the auction that is acceptable by the seller. The auctioneer will accept bids at or above the stated minimum opening bid. The minimum opening bid is stated in all advertising. In order to be affective the opening bid must be low enough to act as an inducement to buyers. Buyers immediately can decide if the property represents a fair value to them.
Real Estate auctions are a win-win situation. The seller sells their property quickly at a fair price and the buyer purchases the property for only one bid more than the next willing buyer.