BUYING REAL ESTATE AT AUCTION
Buying Real Estate at Auction
Buying real estate at auction is easy. The following categories will provide a quick overview to help educate you about the auction process.
Do your homework.
The time before making an offer is when to do your homework. Find answers to your questions, attend open houses, and determine what type of budget you have. We are more than happy to assist however we can during this time. The actual auction is simply the time to offer the price you are willing to pay for your properties of interest.
A real estate auction is the sale of real property in “As-Is” condition for the fair market value, using the competitive bidding process. Most all auction properties are sold “As-Is” meaning the properties are selling without warranties as to its condition and/or fitness of the properties for a particular use. You are solely responsible for examining and evaluating the properties for your own protection. Contracts are not contingent on buyer ability to obtain financing, appraisals or inspections. You should make all desired inspections during the available viewing times prior to bidding.
Although some consumers feel the term “As-Is” is a red flag, the opposite is generally the case in most real estate auctions. Entz Auction & Realty will provide bidders with vital information on the property/equipment, which may include: maps, easements, property condition disclosures (if applicable), tax information, detailed description and other important information. This information should give you the confidence to participate in an “As-Is” auction. Ultimately, it is your responsibility to do your own inspections and due diligence prior to bidding. Even when sold “As-Is”, one guarantee of real estate is often clear title when transferred from seller to buyer. This means all loans/liens of record are paid before the buyer becomes the legal owner The buyer will have an adequate timeframe to have an attorney review the abstract and produce a Title Opinion. A Title Opinion will show any defects or issues that might exist with the title to the real estate. The seller will have adequate time to correct these issues before closing. This ensures the property is being conveyed with a clear title and the buyer is not inheriting or assuming any issues.
Registration at Onsite Auctions.
- There will be a designated time prior to the auction when you can register for a bidder/buyer number, typically an hour or two before the auction.
- You will be asked to present your Driver’s License.
- You will generally be provided with a Bidders Packet.
- Familiarize yourself with the terms and conditions of the auction. Ask questions, anytime! We are always glad to help!
Registering to Bid Online.
- Registration is generally open several days prior to the auction.
- Each online auction will most likely have different terms and conditions such as Buyers Premium, escrow requirements, proof of identity, bank letter of credit, etc. We encourage bidders to register as early as possible.
- Early registration also allows you time to contact our office and get any questions answered and submit required information to get registered to bid.
- The auction will begin promptly at the appointed time.
- The Auctioneer will give any pre-auction announcements, summarize the terms of sale, the methods of bidding, and any last-minute changes, updates or disclosures.
- Generally, the Auctioneer will review the Purchase Contract that the successful bidder will sign following the auction.
- Whether the auction is being conducted on the property or at an offsite location, the Auctioneer will either review the highlights of the property using the Bidders Packet or using a video presentation.
- Bid Assistants are often known as a Ringmen and are staff members who are positioned among the attendees at the auction.
- They provide assistance to the auctioneer.
- They spot your bid and assist you with information to help you in your buying decision.
- You may place a bid by raising your hand. It is a myth that bids can be made accidentally by scratching your nose or similar accidental movement.
- Any tie bids or other issues brought to our attention are resolved by the Auctioneer, who has complete and final authority.
- Real Estate auctions are generally a little slower pace than equipment auctions.
- Bidders offer their bids up to the price they are willing to pay.
- It is not necessary, nor customary, for the Auctioneer to slowly announce, “Going once, going twice, etc.” When it is determined that the final bid has been made, the Auctioneer will identify and congratulate the high bidder.
- The high bidder simply executes the Real Estate Purchase Agreement and makes the required earnest money deposit.
- In a “Subject to Confirmation” auction, the seller retains the right to accept or reject the high bid within a specified time after the auction.
Real Estate Closings.
- Closing on the property typically takes place within 30-45 days from the date of the auction.
- Closing is generally not contingent on financing, appraisals, or inspections.
- The Closing Agent will conduct the closing, file all necessary paperwork, along with the deed, mortgages as well as make payment to the seller.
- Whether it is your first time to purchase real estate or not, we are here to answer your questions.