BUYING AT AUCTION

Q: What are auctions?

A: Auctions are an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property, most certainly including those that are none distressed.

Q: Are auctions only for distressed property?

A: Unfortunately, although most other forms of auctions, like art auctions, have a very positive image, real estate auctions have suffered from a poor image. A majority of auctions today don't result from individuals' repossessed properties, or rather are the results of the smart seller, who chooses the cost effective, accelerated method of selling a property rather than laboring for months or years to sell it. This accelerated sale allows the seller to eliminate virtually all long term carrying costs. This cost savings to the seller are passed along directly to the purchaser in the form of reduced prices. It is truly a win-win situation. Sellers can move on and buyers can purchase properties at a fair market value.

Q: In an auction setting, what are the advantages to the buyer?

A:

• The seller is committed to selling.
• The property is sold at a fair market price.
• The auction situation translates to negotiating power for buyers.
• Buyers may have a choice of several properties at once.
• Buyers can set their own purchase price.
• Long negotiation periods are eliminated.
• The time it takes to purchase property is reduced.
• Because purchasing and closing dates are known, buyers do not need to worry about contingencies.
• Financing available to buyers.

Q: What types of properties sell at auction?

A: All types. Vacant land, Single family homes, multi-family homes, commercial buildings, condos, townhouses, sub-divisions and industrial buildings.

Q: What does Absolute Auction mean?

A: An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also know as an auction without reserve.

Q: What does Minimum Bid Auction mean?

A: An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure or advertisements and is announced at the auctions.

Q: What does Reserve Auction mean?

A: The minimum bid is not published and the seller reserves the right to accept or reject the highest bid within a specified time frame from immediately following the auction up to 48 hours after the auction concludes.

Q: Why do I need to register, and what is involved in the process?

A: Registration is a process of identifying yourself in our system as a potential buyer. If you want to participate in one of our auctions you will need to provide some form of positive ID such as a driver’s license. You will also need to sign the terms and conditions, and show the stated down payment amount in guaranteed funds.

Q: How long does an auction normally take?

A: It normally takes longer to explain the terms and conditions of an auction. The auction itself may take anywhere from 10-12 minutes.

Q: I have not seen a real estate auction before. Can I come to an auction to just watch?

A: Absolutely, we encourage anyone to attend and watch the bidding. You will be entertained and amazed at the process. If you are not registering to bid we ask that you stand to the side in the auction room and allow registered bidders to sit comfortably and bid.

Q: What is a buyer’s premium?

A: A buyer’s premium is the advertised percentage of the high bid to determine the total contract price to be paid by the buyer.

Q: Will buyers be allowed to ask for down payment and closing cost assistance?

A: Yes buyer(s) will be allowed to request down payment and closing cost assistance, this must be disclosed up front. The buyer(s) assistance must be figured into their contract price. Ex: If asking for 3% the purchase price should be 3% over the bid price.

Q: Can one person win more than 1 bid?

A: Yes, once a buyer wins one bid they will be required to sign a winning bidder’s package and once signed they may continue bidding on additional properties. $1,000 initial earnest money will be required for each property.

Q: Can I make an offer prior to the auction?

A: Absolutely. Using our purchase & sale agreement, we will submit your written offer to the seller, and all of the auction terms and conditions will apply. We recommend that you make your best offer at this time.

Q: How do I bid in the "live" auction?

A: It is best to use your numbered bid card to get the attention of the Auctioneer or bid assistant. Once the Auctioneer/bid assistant has acknowledged your first bid, they will be watching for subsequent bids. If you are the successful bidder, hold up your bid card so that the staff can record your bid number on the bid acknowledgement form. If the bidding exceeds your limit, simply shake your head “no” and the auctioneer/bid assistant will know that you are done bidding.

Q: What is "fair market value"?

A: Fair market value is the price that a willing and able buyer will pay for a property in an open market.

Q: How long do I have to close the transaction?

A: Usually around 30 days.

Q: What happens if the high bidder fails to close?

A: Hunter’s Realty, Inc immediately notifies the backup bidder in order to secure a new purchase & sale agreement. All earnest money tendered will be forfeited.

Q: What happens if the buyer can not secure financing for the transaction?

A: All earnest monies are forfeited to the seller.

Q: How much is needed for down payment?

A: Once a bid is won the bidder will must present a minimum of $1,000 in the form of a cashiers check or money order on the day of auction.