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Posts Tagged ‘how to bid at real estate auctions’
Auction Financing
Potential bidders in a real estate auction must be qualified financially in order to participate. At RealEstateAuctions.com, we’ve got an auction financing resource that is literally on the map, nationally.
Bank of America is our preferred lending partner and we couldn’t be more proud.
Bank of America is the largest bank holding company in the United States, by assets. The company operates in every state plus the District of Columbia.
What it means for the consumer is unequaled access to the best financing products available.
Because of the accelerated transaction process that typifies a real estate auction, buyers must come prepared to close. The seller promises clear title at closing, ample inspection opportunities and a price he or she will accept that’s often considerably reduced from a previous listing price. Therefore, bidders must be prepared to close.
This means that auctions are not a place for tire-kicking. Bidders must have cash or financing in place to close within 30-45 days. Winning a property at auction, then starting the real estate financing process, is not the recipe for success. Auction contracts provide for no financing contingencies, no closing date push-backs because of a lack of financing. Bidders unable to close on the specified date risk their earnest money and possibly even more. Sellers may seek additional compensation beyond earnest money from buyers unable or unwilling to close beyond.
With auction financing such a critical component, there’s really no better choice than RealEstateAuction.com’s preferred lender, Bank of America.
What distinguishes our relationship with Bank of America is not only the programs and rates available, but the people. Thomas Faille is Bank of America’s Number One Professional Mortgage Counsultant. That’s correct, he’s Number One in the entire Bank of America operation nationwide. He and his team are regular visitors to the offices of RealEstateAuctions.com, educating our auction specialist Realtors about the newest loan options. And of course, Tom and his associates also meet with our clients interested in financing for auction and non-auction real estate. You can’t beat that kind of personal service from the best in the business.
Be sure to have your financing in order before registering to bid at a real estate auction. We’d be pleased if you’d consider our preferred lender, Bank of America, but off course you’re free to select any lender of your choosing. You’d certainly be wise to compare programs from different lenders, however. It’s always important to get a second and even third opinion on important financial undertakings like auction financing.
How to Bid at Real Estate Auctions
Taking part in an event held by RealEstateAuctions.com is easy. Here’s how to bid at real estate auctions:
Before The Event
- Preview any and all properties of interest on any of the Open House dates that will be held prior to the auction.
- Carefully review the disclosures provided for each property, the terms and conditions, and the sales contract. Be sure you understand all the documentation. Seek the services of an attorney, if appropriate.
- Get a financing commitment from a lender if you will not be paying cash. Waiting to do this crucial step after you purchase could result in denial and loss of earnest money. A lender will be available at the auction event if you have not yet secured a pre-approval, but it is highly recommended you not wait until this point to check. You might not qualify for financing.
- Register on our website as a bidder. We’ll also take registrations at the door on the day of the event, but you’ll save yourself considerable time by registering online. If registering at the door or checking out financing with the on-site lender, be sure to arrive early.
At The Event
Check in at the door with the following:
- Driver’s license, state photo ID or passport
- A cashier’s check in an amount specified (varies per property)
- Personal check to supplement the cashier’s check, if needed
- A pre-approval letter no more than 30 days old from a mortgage broker or lending institution, if you intend to finance your purchase (vs. a cash transaction).
Among the registration items you’ll receive is a numbered card or paddle which you’ll raise at the appropriate time during the auction to indicate your bid.
Getting Started
Taking your seat inside the auction room, you’ll listen to the event facilitator review the legal terms and conditions, along with a basic explanation of how the event will proceed.
The auctioneer will take the podium and kick things off with the first property to be auctioned. A photo and relevant facts will be displayed on large screen. You’ll find the same information on a printed brochure available in advance and at the door. The auctioneer will announce updates on any new additions or deletions that are not part of the printed brochure, so everyone is fully up to date on how to bid.
Each property will be listed in the brochure as “Absolute Auction,” “Minimum Bid Auction” or “Reserve Auction.” The auctioneer will verbally confirm these designations. He then begins the famed auctioneer’s chant, soliciting bids from the crowd. As a bidder, you will raise your numbered card or paddle when you wish to place a bid at the price the auctioneer is calling. Scratching your nose or clearing your throat will not count as a bid.
Depending upon where you are seated in the room, the auctioneer or one of his official assistants standing in the crowd will acknowledge your bid. The auctioneer continues the process, with the price moving ever higher. You can make as many bids as you wish as the process moves along.
If You Win
- Proceed to the designated area to begin paperwork.
- A 5% Buyer’s Premium will be added to your winning bid, making your Total Purchase Price your winning bid plus the Buyer’s Premium.
- Tender the cashier’s check in the amount specified for the subject property. A receipt will be provided.
- Write a personal check, if needed, to make the required down payment on the property, which is typically 5% of the Total Purchase Price.
Properties with a Total Purchase Price of $10,000 or less must be paid for in full on auction day.
Your closing will be scheduled within 45 days of the auction.
Can You Change Your Mind About A Bid?
Yes, as long as you inform one of the official bid assistants while the bidding is still in progress and you have not yet been named a winner of the auction. Mistakes happen, of course, but the auction is serious business and you should be extremely careful about the actions you take during the bidding process. Know exactly what you doing. Do not bid if you are unsure or think you might want to retract.
The Official Bid Assistants
These professionals will be standing among the crowd during bidding. They keep watch over the same section of attendees and are there to help you.
For more information about how to bid at real estate auctions, please don’t hesitate to contact us.