Auction Benefits for Buyers
- Buyer determines the purchase price and market value of the property
- Reduces the time needed to purchase the property
- Eliminates negotiations
- Buyer knows he/she is competing fairly and on the same terms as all other buyers
- Buyer knows property owners are motivated to sell
- Purchase and closing dates are known in advance
Checklist for Buying at Auction
An auction is typically advertised for 30 days, and then the closing usually happens on or about 30 days afterwards. To be prepared, before auction day be sure to:
1. Contact your lender if you need financing. You will need a letter showing you have secured financing to register for the auction.
2. Have a down payment ready. If you are the winning bidder, you will need to make a nonrefundable payment of 10% of your high bid within 24 hours of the auction ending. If you, the buyer, can’t close for any reason, then you will lose the 10% payment.
3. Attend the auction previews. The preview takes place the week before the online auction opens. This is the time when you can look over the property, ask questions, and go through the full terms of the sale.
4. Do your homework. Check out the neighborhood to get a sense of the property values in the area. Get an idea of what you plan to do to the property, and at what cost. This will help you know the price to set for your maximum bidding limit.
5. If you want an inspection done on the property, it will need to take place before the auction. Auction properties are sold “as is" and the seller will not make any repairs to the property. An inspection will give you an idea of the condition of the property and will be used for informational purposes only.