BUYING AT AUCTION

Finding the best deals when looking to buy or invest can be tricky.  The internet is definitely the place to begin your search.  Information on properties for sale is at the fingertips of anyone with an internet connection.  However, not all property listings are created the same or with detailed info and this often causes accurate or up to date information difficult to find.   Whether you are looking to buy at an auction specifically or just searching for the best deal and/or perfect property, we can help!! Our team of expert buyer’s agents are committed to providing top quality service and representation to their clients.      

Popular websites like Zillow, Realtor.com, etc.  unfortunately, publishes information through other real estate data providers on their website showing some homes for sale when they absolutely are not. In most of these properties, the owner has missed a couple of mortgage payments. Zillow displays these properties as if they have already been foreclosed on and listed for sale by the lending institution, which is not the case.  The majority of these properties will likely never hit the market for sale, at least not in the near future. The owner often catches back up on their mortgage payments, and nothing ever happens with the property.  This can be very misleading and frustrating to consumers.  Our team of expert buyer representatives will be happy to utilize their knowledge and expertise to help you dig through information to find properties matching your criteria – on or off market.   

Each auction will have its own set of terms and requirements that you need to understand and follow if you are interested in bidding. Although it is perfectly fine to show up to a live auction to check it out if you are planning on bidding, you will need to officially register as a bidder. This often includes providing some type financial verification showing you have the ability to pay should you win the auction. At Creative Auction Solutions, we strive to make our auctions as buyer friendly and easy as possible. We believe in full transparency and integrity at all times so if you have any questions or concerns, please don’t hesitate to reach out in advance!

It’s very important to have your finances in order prior to attending the sale.  When buying at auction, paying cash is usually the path of least resistance for you as the buyer. Since there are no buyer contingencies at auction, you won’t have a financing contingency on the contract as you may on a standard purchase transaction. This does not mean that you can’t obtain a mortgage to pay for the property, rather that you just must close within the time frame described on the contract agreement (typically 45 days) or lose your entire deposit.  This buyers premium deposit is usually between 5-10% of the winning bid price.

Some real estate buyers will seek out hard money lenders to finance the purchase, especially when it will be a fix & flip. Hard money loans do have their drawbacks, though, including much higher interest rates. You would typically only use this kind of financing when necessary or have a quick turnaround time. If you are hesitant to buy at auction because you aren’t a cash buyer, reach out to us and we can share some additional tips along with give a couple references for good mortgage lenders we have experience working with.

It is typical for auction properties to only allow a limited window of time to view and inspect the property before bidding takes place. This is often done for the convenience of the seller. At Creative Auction Solutions, we always make sure to accommodate any interested parties wanting to view the property before the sale takes place. Additionally, you can usually do a drive-by to get a solid idea of the state of the home.

Experienced investors know how to determine a lot about the state of a property by looking on the exterior. If it looks maintained properly, it probably is nice enough inside, fair condition. If it looks horrible, the interior will likely match. Keep in mind you will be buying the property in as-is, where-is condition. When you buy a house at auction, you do not have an inspection contingency and won’t be able to conduct a home inspection once under contract like you would in a traditional sale process.

Unlike a standard real estate transaction, the buyers due-diligence is to take place prior to the auction and bidding. At our auctions, we provide detailed documentation on everything known about the property. The seller may or may not have any known issues making it important to make yourself comfortable with the condition of the property in advance.
We often recommend our sellers hire a professional home inspector to conduct a “4 point” inspection to provide potential buyers with a copy. The 4 points that get inspected are 1. Roof 2. Electrical 3. Plumbing 4. HVAC. Nobody wants to find out the home they just bought at an auction is a real lemon! Auctioning a house does not follow concepts followed in traditional home sales. Make sure you keep that in mind.

You can learn just about everything you need to know about a property before you buy it – you just have to put in the time and effort to do so. Learn about any pertinent facts. Like the estimated market value, the neighborhood, property zoning/usage, etc. It is always recommended that you contact the auctioneer or auction company ahead of time to get any questions answered and get registered to bid.

Arrive on time and check in. Make sure you verify what identification or documentation will be needed.  More often than not, you will be required to bring a photo ID to check in and a personal/business check.  

It can be exhilarating to win your first real estate auction.  Once the auctioneer officially announces its SOLD, the winning bidder holds up their bidding card for the auction team to verify. Immediately following the auction, the successful buyer will be required to sign a real estate sales contract in addition to making the “buyers premium” deposit.  This deposit will be known by all bidders well in advance of the auction.  Buyer’s premiums for our real estate auctions are usually between 5-10% of the purchase price and they are non-refundable.

The buyers premium deposit  will be held in escrow until closing. The remaining balance of the purchase price  be due at closing. which will take place within 30-45 days of the auction sale or sooner if both parties can accommodate and agree. The seller will provide title insurance in the full amount of the purchase price, and real estate taxes along with any other fees related to ownership will be prorated correctly at closing by the title company. Possession will be given at the time of closing after the papers are signed and funds have cleared with the title company.  Bidding is NOT subject to any contingencies, including but not limited to financing, an appraisal or inspection of the property.