BUYERS AUCTION PROCESS
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 30 days leading up to the auction is the time to find answers to your questions, attend open houses, and determine what type of budget you have. 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 estate property in "As-Is" condition for the fair market value, using the competitive bidding process.
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 or lender inspections. You should make all desired inspections during the available viewing times.
Although some consumers feel the term "As-Is" is a red flag, the opposite is generally the case in most real estate auctions. ProStar Auctions will provide bidders with vital information on the property, which may include: a title search, surveys, zoning, environmental reports, financing, and disclosures. 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.
The auction itself moves quickly. If you are a first-time attendee, you may be surprised to learn that it takes a short period of time, usually less than 3 minutes, to sell a home once the property is introduced and the bidding begins. Having your maximum bidding price in mind and preparing to bid accordingly takes the feeling of intimidation out of the process.
There will be a designated time prior to the auction when you can register for a buyer number. A valid driver's license or proper identification is required, and a registration form completed. You will be expected to show proof of the mandatory earnest money deposit. Generally a cashier's check or cash is sufficient to secure a bidder number, but in some instances, an additional earnest money deposit could be required. This is normally in the form of a personal check up to a percentage of the purchase price. Familiarizing yourself with the terms and conditions of the auction will ensure that registration on the day of the auction will be quick and trouble-free.
In addition, registration is required should you choose to bid online. You must complete the registration form, provide information, and accept the Terms and Conditions of Sale. If you are interested in bidding on more than one property, required funds for EACH property must be submitted. Registrations will be processed and notification will be sent to you within 24 hours of the Earnest Money Deposit(s) being secured. You are bound to the same Terms and Conditions of Sale as those who physically attend and bid at the auction.
Before the auction.
The auction begins promptly at the appointed time with pre-auction announcements summarizing the terms of sale, the methods of bidding, and any last minute changes or disclosures. These comments usually take only a few minutes, concluding with the Auctioneer answering any final questions. If questions are not taken by the Auctioneer, designated Auction Personnel will be available to answer all questions.
Working with the Bidder Assistant.
The Bidder Assistants are auction staff members who are positioned among the attendees at the auction. They are there to assist the auctioneer, spot your bid and assist you with information to help you in your buying decision.
You may place a bid by raising your bidder card. It is a myth that bids can be made accidentally by scratching your nose or similar accidental movement. If you did not intend to bid, simply inform one of the Bidder Assistants or the Auctioneer and the mistake will be corrected. Any tie bids or other issues regarding who has the high bid are always resolved by the Auctioneer, who has complete and final authority.
From the first bid, things move quickly with bidders offering 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 exectues 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.
Closing on the property typically takes place within 30 days from the date of the auction. Closing is not contingent on financing, appraisals, or inspections.
ProStar Auctions Representation
ProStar Auctions is acting solely as an Auctioneer rather than a Real Estate Broker and will not conduct, either in its own name or though any of its principals or employees (who may independently hold a real estate license), real estate brokerage or license services for any seller or buyer.
The auction process is simple, beneficial and fun. If you have additional questions about auctions, please contact ProStar Auctions at 573-365-7272.