Seller’s FAQ’s
What can be auctioned?
Who Sells Property at Auction?
Several groups choose to use the Auction method of sale, including: Private home or land owners, farmers, timber companies, businesses, private partnerships, lending institutions, governments, churches and many other categories of owners.
What are the types of auction sales?
Auctions are not a one-size-fits-all by design. An auction method is chosen for each Seller depending on their needs and the property that is being sold.
Examples of the most common types of auction include: live onsite, Estate Sales, online only, simulcast (live and online hybrid)
What types of properties sell at auction?
Any and all properties are sold at auction every day, including: homes, multi-family units, commercial buildings, condos, townhouses, vacant land, building lots, farm land, recreational land commercial land and many other property types.
Are there different kinds of real estate auctions?
Yes, auctions can be “absolute” or “subject to confirmation” with an (unpublished) “reserve.”
What does "reserve auction" mean?
It means that the property is being offered to the highest bidder, subject to the seller acceptance. In some cases real estate auctions may be conducted with reserve, subject to seller confirmation.
What are the advantages of Auction vs Traditional sale?
It leaves Sellers open to underpricing or overpricing, both of which lead to loss.
Pricing also sets a ceiling, whereas auctions drive prices up and have no maximum or price limit.
Auctions create a sense of urgency and produce true fair market value.
What does "absolute auction" mean?
A property that is sold at absolute auction will sell to the highest registered bidder regardless of price.
There is no minimum. These types of auctions generate the most amount of interest because buyers are confident they have a real chance to buy if they are the winning bidder.
What qualifies whether a property is suitable for auction?
The owner does. An owner’s motivation is the most important factor to determine the marketability of the property. The ideal candidate is motivated seller who has equity, good condition, favorable location for use and desirable amenities.
Can I auction a property that has a mortgage, taxes or liens owed?
Yes, most sellers have a mortgage or lien on their property. Any outstanding debt will be satisfied at closing from the proceeds of sale.
What is a buyer's premium?
A buyer’s premium is the commission paid at auction by the buyer. It is usually 10 percent of the final bid price. The total contract price is calculated by adding the buyer’s premium to the high bid.
Example:
High bid – $1,000,000
Buyer’s premium – $100,000
Contract price – $1,100,000
What is "fair market value"?
Fair market value is the price for which a property will sell on the open market between a willing buyer and a willing seller, neither being forced to buy or sell as of a specific date. Fair market value is the price that a property will fetch at a well-advertised auction.
Where will the real estate auction be held?
Depending on the location, type of property and where potential Buyers will come from, the Auctioneer will determine rather an “on-site” auction, online only auction or simulcast is most appropriate. After conducting a property analysis and seller qualification, the Auctioneer will decide the best plan given your specific circumstances.
Will I sign an agreement if I decide to sell my property at auction?
Yes, the law requires Sellers to sign a real estate auction listing agreement.
What is the usual timetable for a real estate auction?
The typical timeline for sale is 30-90 days from the time your property is listed until the auction date.
This provides ample time to collect information, take pictures and video, distribute media, prepare documents and allow for property previews.
Buyer’s FAQ’s
Who Sells Property at Auction?
Several groups choose to use the Auction method of sale, including: Private home or land owners, farmers, timber companies, businesses, private partnerships, lending institutions, governments, churches and many other categories of owners.
What are the types of auctions?
Auctions are not a one-size-fits-all by design. An auction method is chosen for each Seller depending on their needs and the property that is being sold. Examples of the most common types of auction include: live onsite, online only, simulcast (live and online hybrid), sealed bid, absolute, reserve.
How do I register to bid?
To bid on site, bring a valid driver’s license and complete the brief registration form. The process only takes a few minutes. Some auctions may require a bidder deposit to be made in advance of the auction. This information will be clearly spelled out when you go to register. Don’t forget the cashier’s check or other form of down payment required to bid. To register online, click here.
Can I Inspect Before I Bid?
Since purchases are made as-is, where-is, all auctioneers are required to offer a period of inspection. These times are usually posted online or in some cases a viewing may be scheduled with the Auctioneer.
What is required to bid at Auction?
Auction Buyers should bring Identification, and a cashier’s check or business or personal check accompanied by a bank letter of guarantee or other proof of funds.
What Is A Buyer's Premium?
Although the buyer’s premium may change from time to time, it is usually 10 percent of the winning bid.
May I use Financing?
While financing is an acceptable means of payment, the transaction is not contingent upon it being awarded and a backup plan should be in place should the financing fall through for any reason.
Will I get clear title?
Yes. The only contingency in real estate auction is a clear and marketable title.
Will I get Title insurance?
It is the Buyer’s option to purchase title insurance. In most cases it is recommended. The buyer will be responsible for all closing costs, including title insurance.
Can I use my own attorney?
Yes. The terms will name a closing attorney/company to conduct the closing of the transaction, for which the Buyer is responsible. If a Buyer wishes to have its own representative review the documents, a Buyer may do so at its own expense.
Is there a reserve price?
Most properties are offered “subject to seller confirmation” (a reserve auction) unless otherwise advertised as “absolute.” Properties sold “subject to seller confirmation” or “reserve” will not have a published reserve price, and the high bid is subject to seller approval.
What does Absolute Auction mean?
Properties advertised as “absolute” have no minimum reserve value and will sell to the highest and best bidder on auction day.
Do I need to use a Real Estate Agent?
If a buyer will be more confident having representation at an auction, the Auctioneer will welcome cooperating with registered agents. Buyer’s representatives will register the buyer as a client, attend the auction, and assume the role of a buyer’s agent.
When will I sign the Contract?
If you are the winning bidder at auction, rather live or online, you will need to sign a purchase and sale contract immediately following the auction.
When will I need to put down the deposit?
Winning bidders will need to submit their deposit upon signing the contract on auction day and may utilize a check or wire transfer to deliver funds.
When will I know if my bid is accepted?
For properties selling with reserve, Buyers will generally have an answer the same day or within 2-3 days.
When is title transferred?
The transaction will generally close within 30 days of the auction. Once funds have been received and all parties have signed the appropriate documents, the Buyer will receive title and possession.
Can I back out of the Contract?
Auction contracts are binding legal documents that cannot be canceled. If a Buyer walks away from an auction contract, they will lose 100% of the deposit money and be subject to legal repercussions.
What is "High Bidder's Choice"?
In this method of auction, winning bidders will have the right to select from 2 or more lots (properties). This type of sale is more complex than an auction offering only one property so it is important to discuss the details well in advance of the sale with the Auctioneer.