| Buyer FAQ |
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Q: How should I prepare to bid at a real estate auction? 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 streamlined process. 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 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 once for a sealed bid auction and one increment over the next highest bidder to win at a conventional auction. 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. 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 look at the property, ask questions, review materials and register with your Capital Commercial representative. 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 a 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. 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 important facts. You should familiarize yourself with these prior to the auction. Summaries of the Terms and Conditions are available in the auction package. Terms. 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. 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 Capital Commercial representative 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". If you are ever unsure whether your bid is the high bid at any given time, feel free to ask a Capital Commercial Representative 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 Generally, property is conveyed by Warranty Deed, free and clear of liens and encumbrances (except for foreclosures, statutory power of sales, etc. Please see the "Terms and Conditions" of the particular auction for specifics). Closing costs are primarily governed by the State and County in which the property is located. The closing period is in the Purchase Agreement and is generally 30 days after the auction. Visit the Capital Commercial’s Auction website or give us a call or e-mail us at
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Some companies require you to register upon entering the auction site. Others permit you to inspect before you register. In either case, the registration process will usually require you show some form of identification and may require you to leave a cash refundable deposit. If asked to sign something, make certain you understand the terms of sale before you sign as you will be held to them. Providing a business card may speed up the registration process. Upon registering, you will be provided with a bidders' number and, often, a sale catalog. A buyer's premium is a percentage of the high bid that is added to the high bid to establish the total purchase price. For example, if your high bid is $2,000,000. and that particular auction is using a 6% buyer's premium, the buyer's premium would be $120,000 ($2,000,000.) high bid multiplied by 6%) and the total purchase price would be $2,120,000. Please refer to the Terms and Conditions of specific sales to see if the buyer's premium is applicable. An absolute auction means that the property is sold to the highest bidder, regardless of price. A reserve auction, sometimes also referred to as an auction "subject to confirmation," means that the seller reserves the right to confirm the high bid at the conclusion of the sale. Unless explicitly advertised as "absolute" and likewise disclosed in the Terms and Conditions, auctions are "reserve" auctions. This means that you are bidding on the property where it is at the auction and in whatever condition it is in at the auction. There is no representation as to the working condition of property and no warranty or guarantee is provided or implied. Therefore, you need to do your inspections prior to the auction so that you know the condition of the property on which you are bidding. Material defects known to the auctioneer prior to the auction will be disclosed. However, the auctioneer makes no representations, guarantees or warranties as to the property. Please ask us. Each auction listing has a contact person with telephone number. Or you can e-mail us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |