w
Buyers
Buying at Auctions
If you are a BUYER who wants to make a smart investment at fair market value and are tired of endless negotiations with unresponsive sellers, then the purchase of properties at auction will work for you. A real estate auction is an accelerated marketing method for selling real estate to a pre-qualified buyer who will name his or her own price. The successful buyer has the knowledge he didn’t pay too much for another bidder was willing to pay slightly less than the high bid. Informed buyers attend auctions to acquire property in an efficient manner, knowing the property will be sold on a certain day, at a price they determine.
Benefits to Buyer
- Smart investments are made as properties are usually purchased at fair market value through competitive bidding.
- The buyer knows the seller is fully committed to sell and will sell at the lowest possible price.
- In multi-property auctions, the buyer sees many offerings in the same place at the same time.
- The buyer has negotiating power in that he can drop out of the bidding at any time if the price is too high.
- Auctions reduce time to purchase and eliminate long negotiation periods
- Purchasing and closing costs 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 package.
- Buyers can receive favorable financing through third-party arrangements.
- Buyers do not have to worry about contingencies.
The Buying Process
The steps leading up to your auction take the following course…
- Research as much as you can about the property. Request a Property Information Package which contains photos, a deed description, terms of sale, a sample Purchase and Sale Agreement, property tax and assessment information, survey, financial contacts and other informative documents.
- Inspect the property for you are buying property “as is, with all faults.” Personal inspection is the buyer’s responsibility and can help you determine value and desirability of property.
- Prequalify for financing for an auction will require you to execute a non-contingent contract to purchase. Your lender will help you determine your purchase level, increasing your comfort level and allowing you to bid with confidence.
- To familiarize yourself with the auction process before participating as a bidder, you should attend an auction as an observer so you will know what to expect.
- Come to the auction with a bid strategy. Examine the properties, review the Property Information Package, and know your bid limit.
- Register to bid and arrive early enough to ask any last minute questions. At registration you will receive a bid package containing your bid number and Property Information Package.
- Bid and compete aggressively. You can’t buy at your price unless you bid your price.
- You are a successful bidder. You will sign a purchase and sale agreement, pay your 20% non-refundable down payment, and survey fee. Expect to close in 30 days or less.