MILLION DOLLAR SERVICE INEVERY PRICE RANGE
Real Estate Auctions are no longer reserved for "distressed" or "hard to sell" properties. Thanks to the wide spread popularity of eBay and other popular Internet Auction Services, consumers are becoming more familiar with the auction process.
There are 3 types of Real Estate Auctions, "Absolute", "Minimum Bid", and "Reserve". At an "Absolute Auction" the property is awarded to the highest bidder with no "minimum bid" requirement. This type of Auction is good for properties that are difficult to value, or for those that have been on the market for an extended period of time.
At a "Minimum Bid Auction" the sellers set a "sales price" - the property will only be sold if the bid goes over that established price. At a "Reserve Auction"sellers set a "reserve price" above the minimum starting bid and do not reveal it to bidders until it has been equaled or surpassed. If the bids do not match or exceed the "reserve price" the seller does not have to sell the property.
As a Real Estate Professional, I want to educate my clients and dispel the myth of "bargains and fire sales" at Auctions. I work with my clients prior to deciding to list the home at an Auction, or prior to attending an Auction with them to bid on a certain property.
The most important aspect of a successful Auction Experience is "doing your homework", due diligence. It is of the utmost importance that the client is familiar with the property. In some cases it is possible to have the property inspected, and even evaluated by a contractor prior to the day of the Auction. Gather as much information as possible on the property, the history, the permits, the assets and detriments, and any other issues that could materially affect the value of the property, including liens and encumbrances, if possible. A thorough Comparative Market Analysis is key to knowing where to set your expectations as far as a sale goes, and is integral to knowing where your bid should be when you are bidding to purchase, and at what point it is no longer a viable option.
Most of the real estate Auctions in south Florida consistently achieve market value or better as far as a final sales price.
There are usually Registrations from the Auction House to be completed by the bidders (occasionally days in advance of the Auction). Some require an escrow deposit or minimum deposit in order to participate. Sales are usually "As Is" and the Auction Contracts usually DO NOT have a Mortgage Contingency. This means that in the event the buyer does not qualify for the purchase, their deposit would be at risk. Financing should be solidly in place prior to bidding on a property.
There are Live Auctions that typically take place at the subject property and usually last only a few minutes. Some Auctions are held on the Internet. Some may be "Sealed Bid Auctions", and others may be a mixture of "Sealed Bids" and Live Auction.
Once the Auction has ended and a bidder has been named Purchaser he/she becomes a Contract Holder. The property will generally be conveyed by a Warranty Deed at a Closing typically scheduled 30 to 45 days after the Auction. Most Deeds from Auctions are transferred "Free and Clear" of any Liens and Encumbrances, except for Foreclosures and Statutory Power of Sales. This is something important to check prior to the actual Auction.
As with most things in life, the success of any Auction - or any Sale and Purchase for that matter, is the diligence dedicated to the "groundwork" and the investigating prior to the Auction. An educated participant has the best chance of achieving their goals - whether buyer or seller.