Here`s a general buyer`s guide to real estate auctions, based on advice from experts in the field:
– Read the papers, get on a list. The Sunday newspapers are usually jammed with advertisements in real estate sections for property up for auction. Also, auctioneers can put you on their mailing lists and provide a calendar of sales.
– Get a brochure. The auction company will send you material that provides basic information on the property, such as total square footage and the latest asking price. Photos are included.
– Learn the lingo. Auctioneers have a language of their own. For instance, an ”absolute auction” means the property will be sold to the highest bidder, while an auction with ”reserve” means the owner can reject even the highest bid.
– Inspect the property. Most auction companies have open houses at least a week before the auction date. If none is planned, ask for permission to see the property beforehand.
– Ask questions. You`ll want to know what`s included in the property-such as kitchen appliances or carpeting-or how long any remaining tenants will be occupying a residence. At the site you`ll get even more information, like a sales contract, an engineer`s report, floor plans or financing information. It`s a good idea to have a lawyer or accountant look through this information. – Register. To make a bid, you must register with the auction company. You should do this only after you or your lawyer has completely evaluated the property. Registered bidders will get a ”bid card” that entitles them to participate in the auction. In addition, auctioneers require that you bring a cashier`s check or money order with you to the auction.
– Arrive early, listen. At the day of the auction, try to arrive an hour early to ensure a seat. Listen for any announcements before the auction starts, such as changes in the property or terms of the auction.
– Be ready to pay. The highest bidders are required to sign a real estate sales contract when the bidding is concluded. Your cashier`s check is taken and used as ”earnest” money. At that time, bidders may have to increase their ”earnest” money to the required percentage amount, usually 10 percent of the bid. –