Auction sale
May 6, 2019 | Iulia Zecheru
What does a buyer need to know about buying a property at an auction sale? Buying a property at an auction is not a complicated thing. If the buyer follows the guidelines, it’s an easy process. Here’s what you need to know about the auction process.
Buying a property at an auction is not a complicated thing. If the buyer follows the guidelines, it’s an easy process. Here’s what you need to know about the auction process.
- Date of the auction – Be there 1h before the time of the auction. Usually there will be an open house 1 hour prior or the week before the auction so the bidders will have the opportunity to see the condition of the property. It may be a good idea to bring a contractor to the open house to get a quote regarding the necessary repairs.
- Registration – 1h prior the auction you would have to sign in with the auctioneer to register. For the registration you would need a cashier’s check made to the Auction group and a blank personal check. These will be checked by the auctioneer and you will receive a bidding number. Expect the checks to be cashed 3 business days following the auction.
- Auction – The auction will start with the auctioneer reading the instructions and conditions and will last 1 minute. Bidding will increase by $5000 or by an amount set by the auctioneer. The highest bidder will pay 10% deposit: for example, if the property is $500,000 the deposit will be $50,000 consisting of the $5,000 cashier’s check and $45,000 on a personal check. The property sold is As-is, with no warranties expressed or implied. The buyer should reply on their on inspections and research.
- Confirmation in Court: After 30-60 days after the auction, a date will be set up to confirm the sale in court. The sale is subject to the Public Administrator’s approval and Probate Court confirmation. Higher bids are accepted in court and they need to be in an anount equal to the accepted bid, plus 5% of that amount plus $500.
- Completion of the sale – After the confirmation in court, Escrow will be opened. The length may vary, it can be 45 days or longer. The buyer get finance, but there will be no contingencies during escrow. In a normal escrow, the buyer has an inspection, disclosures, appraisal or loan contingency. For example, if the condition of the property is not satisfactory to the buyer, he can change his mind and not lose the initial deposit. That is not the case with a property bought at auction. Also, the buyer has to pay for termite inspection/clearance, NHD report or (9A).
The process of buying a property at an auction is pretty simple once the buyer has understood the necessary steps and guidelines.