Buyer FAQ’sQ: I’ve never purchased a property at an auction. Where do I start?
A: Study the information available about the property in advance. The terms of a Real Estate Auction can vary, depending on the type of auction the seller has chosen. Visit the property at an Open House and ask questions. Get any necessary financing arrangements made ahead of time. Always ask questions for a clear understanding of the auction process.
Q: Since I’m not familiar with Real Estate Auctions…how can I be assured that all Dept. of Real Estate rules and regulations apply?
A: Brokers/Auctioneers must abide by all applicable state and federal real estate laws.
Q: Can I have any inspections done on the property before deciding whether or not to bid?
A: Absolutely! All property is sold “as-is, where-is” on the sale day, so you should do your inspections and ask questions prior to the sale. On the sale day, the property is sold with no contingencies required. Dept. of Real Estate disclosures are provided on the property prior to the sale: You may make arrangements with us for any other inspections you would like, as long as they are completed prior to the sale.
Q: How do I determine how much I should bid?
A: The auction is the oldest established method of determining the value of property. The property is worth what qualified buyers are willing to pay! At an auction, you immediately know what other qualified buyers are willing to pay, so you’ll know that the price is a fair market value.
Q: What if I need time to get financing?
A: Your financing should be arranged prior to bidding on a property. This determines how much you personally can pay for the property, and establishes your comfort zone in the bidding process. There is a 30 day time frame for the buyer to wrap up loose ends prior to close.
Q: What is the Buyers Premium?
A: The Buyer’s Premium is a fee, added to the winning bid to determine the final purchase price. It should be taken into consideration when you are bidding.
Q: How much do I put down as a deposit?
A: A 10% deposit, determined by the final purchase price, is required on the day of the sale. The terms of the deposit will be in all advertising and brochures on the property. This deposit is non-refundable. The balance is generally due in 30 days or less.
Q: How do I register to bid?
A: You can pre-register with our office, or register at the auction site on the day of the sale up to one hour prior to the auction. You will be asked to provide identification and certified funds per the terms and conditions of the auction. Verify the terms with our office prior to attending the sale.
Q: What if I’m already working with a Real Estate Agent and want to bid on property being sold at auction?
A: You can certainly include your agent/broker in the auction process! They must complete a Broker Participation Agreement specifying you as their client 48 hours prior to the auction event. You, as the the buyer, must still register as a bidder. Your broker will be compensated by us at the close of escrow if you are the successful bidder.
Q: I’ve never bid at an auction before, and I’m concerned that I might not understand what the amount of the bid is!
A: Remember that the auctioneers and their staff want you to completely understand the process. Prior to the start of the auction, the auctioneer will make announcements, and give all attendees the opportunity to ask questions. Once the auction begins, a bid assistant may help in relaying bids to the auctioneer. If at any time you don’t understand where your bid is, or another person’s bid, always ask! Don’t make the mistake of trying to hold back if you want the property. Otherwise, you might end up missing your opportunity.
Copyright 2006-2007 AJ Karas Auctioneers, LLC. All Rights Reserved