Things that you should know about a real estate auction …
- Real Estate Auctions are typically "NO CONTINGENCY" and the Property condition is "AS IS".
- In Virginia all auctions have "reserves" unless stated otherwise so if the bid price does not meet what the seller wants he does not have to sell it. "Starting bids" are just that a start, indicating that bids under the staring bid will not be entertained.
- They require a substantial non-refundable deposit the day of the auction from the winning buyer/bidder. If you plan to bid bring a cashier or certified check for the amount stipulated in the terms of sale made out to you and if you are the winning /bidder/buyer, you will endorse the check over to the auction company at the conclusion of the auction.
- There is a “bid” price and a “contract” price. Expect a “buyer’s premium” which is added on to the bid price to make the final contract price. Buyers’ premiums are listed in the terms of sale.
- The auction company will have a purchase agreement that will be completed by the seller and the winning bidder. Typically closing to take place in 30 days.
- Typically, the sellers will allow for inspections prior to the auction at the buyers cost, ask if this is allowed.
- If you are seeking financing, this must be established before the auction and remember it’s a NO CONTINGENCY SALE.
Real estate licensees:
- Register yourself and your buyer with the auction company prior to viewing so if compensation is offered, you will qualify.
- Attend all viewings, and inspections with your buyer.
- Lead the discussions.
- If you are using a licensee have them register with the auction company prior to you contacting the auction company so they will qualify for any compensation available.
- Have the licensee arrange a viewing and attend all viewings of the property with you and your inspectors.