You’ve been curious on auctions for a while now and finally want to attend one. Not sure what to expect? We can help:
What is an in-person auction like?
An in-person auction can seem overwhelming as there are many moving parts. The good news, even though you may feel a bit overwhelmed, is that there is a place for everyone at an auction. Don’t think that you have to buy something to attend an auction. A lot of avid buyers at auctions started by attending many auctions to get the feel down so that they could be the highest bidder on the item of their choice when it came time to get involved. Outside of attending the auction there are a few other things you can learn about.
-Registering to bid
-How to bid
-How to pay for your items
-Auction terminology and language
Auction Terminology
Going to an auction can seem like a foreign country if you attend without learning the language. These terms will get thrown around at the auction. The last thing you want to be is confused and not enjoy the learning experience. Common terms in auctioneering are:
Final bid
Bidder buys
Owner terms
Owner financing
Bid price
Announce
Bid call
As Is, Where Is
Absolute auction
Liquidation
Catalog
Heirs
Beneficiary
Descendant
Durable power of attorney
Executor (mail)
Executrix (female)
Life estate
Living will
Will
Probate
Personal representative
Power of attorney
Testate
Intestate
Personal property
Contingencies
Restrictions
How to purchase property at an auction?
KNOW WHAT YOU’RE LOOKING FOR
The first step is to find out what you want and set the criteria. Are you looking for a lot? An old fixer-upper? Specific location? Size? Single family or multi-unit? Residential or commercial? These are all questions to consider prior to arriving at the auction so you a) attend the right auction b) get property you want.
SET A BUDGET
This is important. At auctions when you really have your heart set on a property it’s easy to get involved and have your competitive side come out. Next thing you know you’ve won the auction and you’re $50k over your budget. When setting your budget take into consideration a “buyers premium”, repair costs, and any other potential costs that could be associated with the property.
FINANCING OPTIONS
While cash buyers have the advantage when buying property at an auction, it’s not necessarily a requirement when attending. If you are not a cash buyer it is imperative that you secure financing prior to attending the auction. Locking down financing however will not be contingent upon the financing received. give you a fair competition vs cash buyers in attendance. A few of the recommended financing options that we recommend are:
-Hard Money Loans
-Conforming Mortgage
-Non-Conforming Mortgage
If you are serious about an auction remember cash is king!!
Show up and bid
All bidders in attendance must register either prior or the day of the auction. If you do not register you will not be able to bid. Most auctions require a buyer to put down a non-fundable, 10%-15% down payment of final bid price on the day of sale.
Now that you’ve done your research, know what you want, learned the terminology, it’s time to start bidding. Don’t forget to register prior to the auction if you plan on bidding. Good luck and happy bidding!