Real Estate Buyer FAQs
Q. WHAT TYPES OF PROPERTIES ARE SOLD AT AUCTION?
A. Billions of dollars worth of Real Estate are sold every year at auction including single family dwellings, agricultural, commercial and industrial, recreational properties, condominiums, apartments, and raw land to name a few. All are effectively marketed and sold through the auction method. Today, most auctions are not the result of distress, but rather a seller choosing a cost-effective, accelerated method of selling their property now instead of waiting months or years for a sale by other means.
Q. HOW SOON CAN WE SETTLE?
A. The seller sets the terms for settlement; however, we recommend 30-45 days. As long as the buyer and seller agree, some properties settle in as short as 1 week.
Q: HOW SHOULD I PREPARE TO BID AT A REAL ESTATE AUCTION?
A: The primary difference between buying real estate at auction versus buying real estate conventionally is that at auction, you do your property evaluations and inspections, and prepare your financing prior to coming to the auction. If you have done your homework in advance, evaluated what the property is worth to you, and have arranged for the financing, buying real estate at auction will be a fun and easy. By doing your work beforehand, you can bid with confidence. You will know what you are getting for your money, from where you are getting your financing, and when you will close your transaction (generally 30 to 60 days after the auction). By participating in the auction process, you can feel confident that you are getting the property at a fair price because you need only bid one increment over the next highest bidder to win. The fact that all bidders are playing by the same set of rules avoids losing real estate over contingencies or seller concessions-if a contingency or concession is offered to one, it is offered to all.
Q: WHAT DO I NEED TO DO ON AUCTION DAY?
A: Properties are open 1 hour prior to the starting time to allow buyers to do a final inspection. It is advisable that you arrive at the auction site at least 30 minutes prior to the time of the auction. By doing this, you will have plenty of time to take a last look at the property, ask questions, review materials and register. A real estate auction can be over in a matter of minutes so don’t be late! Although there is no obligation to bid at an auction, all prospective buyers must register in order to bid. To register, you will need to provide evidence that you have the earnest money deposit required to bid. A valid driver’s license or other acceptable form of identification is also required. The earnest money deposit must be in the form of cash, certified check or bank/cashier’s check. See the Terms and Conditions of each sale to obtain the specifics as to the deposit requirements for the property of your interest.
Q: WHAT ARE THE TERMS AND CONDITIONS OF THE SALE?
A: The Terms and Conditions govern the sale. They include information such as the required deposit amount, when the sale of the property will close, and other key facts. You should familiarize yourself with these prior to the auction. Summaries of the Terms and Conditions are available within the property listing on our web site or in the property information packet. You should note that at an auction sale, any announcements made by the auctioneer on the day of sale take precedence over previously published or verbally conveyed terms and conditions. So, be attentive at the sale!
Q: HOW DO I BID AT AN AUCTION?
A: In order to bid at an auction, you need to attract the auctioneer’s attention. You can hold up your bidder card, you can wave, or you can shout out “Yes”. Many times there will be a bid assistant circulating among the bidders who can also convey your bid to the auctioneer on your behalf. Conversely, if you want to take yourself out of the bidding, just shake your head no when the auctioneer looks at you, or answer “No”. It's as easy as that. If you are ever unsure whether your bid is the high bid at any given time, feel free to ask a bid assistant or the auctioneer to confirm this. The auctioneer wants to provide you every opportunity to place your bid and will not allow you to bid against yourself.
Q: HOW IS THE PROPERTY TRANSFERRED TO ME?
A: Generally, property is conveyed by special Warranty Deed, free and clear of liens and encumbrances. The closing period is in the Purchase Agreement and is generally no later than 30 to 60 days after the auction.
Q: WHAT IS TITLE INSURANCE?
A: Title insurance assures you a clean, clear, merchantable title to the purchased property. Purchasing title insurance is the responsibility of the buyer.
Q: WHEN WILL I BE CLOSING/SETTLING?
A: The real estate purchase agreement will specify a closing date, customarily on or before 30-60 days, following the auction. The closing is held at either, a settlement company or attorney of your choice. When merchantable title is obtained and both parties are prepared to close, the buyer may often be accommodated with an earlier closing. Time is of the essence for both the buyer and the seller, and our services cater to the needs of both parties.
Q: WHEN WILL I BE GIVEN THE KEYS?
A: Keys and possession will be given at the time of closing, subject to existing lease or rental agreements, if any.
Q: WHAT HAPPENS TO THE TAXES, RENTS, AND LEASES OF THE PROPERTY?
A: All previous years taxes will be paid prior to or at closing by the seller. Current year taxes, leases, and rents will be prorated to the day of closing.
Q: WHAT DOES "SUBJECT TO SELLER CONFIRMATION OR RESERVE AUCTION" MEAN?
A: Seller confirmation means the seller reserves the right to accept or reject the final bid. Auction properties sell subject to seller confirmation, unless otherwise denoted. However, at Detweiler Auction & Realty, LLC, we typically have a sales success rate of OVER 95%. This means that 95% of the properties we market have met the seller’s expectations. In the event the bid is declined, we work with the top bidder to reach an agreement on price. Often, we reach an agreement immediately or shortly following the auction.
Q: WHAT DOES "ABSOLUTE" MEAN?
A: An absolute auction means that the property will sell to the highest bidder, regardless of price with no limiting conditions.
Q: WHAT WILL I NEED TO BRING TO THE AUCTION?
A: For most Detweiler Auction and Realty, Inc. Auctions, you will need to bring a deposit in the form of a cashier's check or cash. The amount required will be located in the brochure or the Property Information Package (PIP).
Q: WHAT HAPPENS IF I AM THE SUCCESSFUL BIDDER?
A. Immediately after the event, you will pay a non-refundable deposit and sign a contingency-free contract agreeing to close within 30-60 days.
Q: CAN I MAKE THE CONTRACT CONTINGENT UPON FINANCING OR INSPECTION?
A: No, the auction contract is contingency-free. For this reason, it is very important that you finish your property evaluation and arrange any needed financing before the auction.
Q: WILL I BE ABLE TO UNDERSTAND WHAT'S GOING ON DURING THE AUCTION?
A: Yes. Before the sale, we ordinarily conduct a mock auction so that everyone can get a feel for the pace of the sale and the chant of the auctioneer. If you have a question during the sale itself, just ask one of the bid assistants or the auctioneer.
Q: IF SOMEONE DOES NOT MAKE AN OFFER ON A PROPERTY WHEN IT WAS OFFERED THROUGH AN ORDINARY LISTING; WHY WOULD THEY BID AT AUCTION?
A: The most common reason is that they never knew about the property before. The compressed time period for promoting an auction allows us to bring the property to the attention of far more people than would be possible in an open-ended campaign. Another common reason is that the property may have had an unrealistically high asking price. When an asking price is out of line with the true market value of a property, many buyers feel that there is no point in making a lower offer. With an auction, there is no asking price, so we don't have that problem.
Q. IS THE PHYSICAL CONDITION OF THE PROPERTY WARRANTED?
No. Conditions of properties vary. Properties are sold "as is-where is". You will want to evaluate the overall condition of the property and determine if there are any defects. While these may be acceptable to you, it may affect the amount you want to bid, so look before you bid. Detweiler Auction and Realty, Inc. encourages all bidders to inspect the property prior to the sale.
Q. HOW CAN I BE ASSURED OF GETTING CLEAR TITLE IF I AM THE HIGH BIDDER?
A. Our real estate contract calls for the seller to give clear, marketable title.
