Buy Real Propery at Auction
Have you ever considered selling real estate at auction?
Auction Types / Methods / Models
Types of Auctions
Absolute Auction
An auction in which the property is sold to the highest qualified bidder with no limiting conditions, contingencies or amount on the specified auction date. By nature it promotes a sense of urgency for any interested, potential buyer to perform by a specific time or forever lose the opportunity to buy. Absolute Auction is the only form of marketing your property that will convey this message without qualification. Absolute Auction informs buyers that the seller is committed to sell; therefore, attracting buyers committed to buying. By using the Absolute Auction method we will attract the largest pool of qualified buyers to compete for your property. This creates greater enthusiasm and more active bidding.
Reserve Auction
An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids under the reserve, or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer.
Confirmation Auction
An auction in which the seller may accepts or declines the highest bid on auction day.
Auction Methods
On-Site
The auction will be conducted on the actual property. Bringing bidders on-site allows them to be constantly reminded of the positive aspects of the property thus encouraging higher bids.
Live Online
Utilizing an innovative and dynamic auction platform with the most advanced technology available, we will use our service providers to broadcast the auction simultaneously during the LIVE auction event. Registered online bidders will be competing against the live auction bidders during the auction. This feature also allows the online bidders to view and to hear the live auction in real time.
Sealed Bid
An auction where bids are not made known to the bidding public. Sealed Bid procedures vary from mailed, e-mailed or faxed bids to procedures where people congregate to submit bids at a common site. Sealed Bid options may feature one round of bidding, whereas other procedures allow for frequent rounds of bidding continuing until a high bid is determined. Sealed Bid method is usually recommended in an environment which might not have a lot of competitive bidders.
Ballroom / Consignment
A Consignment auction is one which a seller enjoys traditional marketing and exposure by being included in a multiple sale auction without the expense of a traditional marketing campaign. The real property is turned over to an auctioneer by its owner or those representing the owner, to be sold on a commission basis and usually under specific conditions. Such property is often combined with property from other consignors and the marketing expenses are divided amongst each of the individual sellers resulting in a decreased expense for each individual.
Private Treaty
In addition to the other auction methods, Real Estate Auction Associates understands that the perceived “urgency” that is created by the auction method in many times creates significant pre-auction offers that may be approved by the seller before the auction takes place. These offers are generally above current market value and will be analyzed by the auction firm and seller and executed by a licensed real estate professional where the property is located.
Auction Models
REAA utilizes over 11 different types of auction models and have implemented state of the art auction technologies. Such models and technologies include, but are not limited to:
- Direct Response
- Dual Bid
- Fax Bid
- E-mail Bid
- Gala Style
- Hybrid Auction
- Live/Online Bidding
- Live/On-Site Bidding
- Online Bidding
- Multi-Par
- Satellite Bid
- Sealed Bid
- Tele-Bid
Plus other proprietary auction methods to get your property the highest amount of worldwide exposure.
Buy / Buying Real Property at Auction
Inspect the Property
Property sold via the auction method of marketing is sold as is, where is and is not contingent upon financing. Therefore it is the responsibility of the buyer to conduct their due diligence on the property being sold prior to the auction. Property inspection dates and times will be outlined in the Property Information Package which can be downloaded from our website for each auction respectively.
Have Your Financing in Place
Our auctions are conducted not contingent upon financing, therefore it is recommended that you have the funding for your purchase in place prior to bidding at the auction. In many cases pre-qualification will be a requirement in order to take part in bidding at one of our property auction events. Our auctions require a 10% deposit on the total contract sales price the day of the auction. In the rare event that you were unable to secure your funding prior to bidding at the auction and the property does not close escrow by the terms outlined (normally 30 days or less) then the full 10% deposit will be forfeited.
Buyer’s Premium
The Buyer’s Premium is an amount (normally 10%) which is added to the final winning bid in order to arrive at the Total Contract Purchase Price. For example, if the final winning bid is $150,000 you would calculate this amount by 10% to reach the Total Contract Purchase Price of $165,000. As the Terms & Conditions vary with each auction it is important for you to review the terms of the auction in advance.
Determine Your High Bid
It will be to your advantage as a buyer to have a pre-determined notion on how much you are willing to spend for the property on auction day. There is much due diligence that is done by our firm prior to the auction which is made available to you, the buyer, in the Property Information Package. Remember to calculate the buyer’s premium into your figures. Preparation and knowledge are key to ensuring a successful auction purchasing experience.
Type of Auction Being Conducted
Please refer to the Auction Types / Methods / Models tab on our website for the definition of the different auction methods. As property auctions vary it is important to review the Property Information Package and the Terms & Conditions of the auction for the property auction that you are interested in.
Broker / Agent Representation
It is not a requirement to be represented by a broker or agent to attend and bid at one of our auctions. We are happy to say that we fully cooperate with and welcome all brokers and agents. If you are currently represented by a broker or agent please discuss your interest in our auctions with them and ask them to contact us directly for further details on how we will cooperate with them through the auction process and what their role will be as your representative.
The Auction Event
Be absolutely sure that you have completed all of your due diligence on the subject property, that you have determined your high bid, that you have your cashiers check bidding deposit, that you have your financing in place, that you have the monetary means of providing the remaining funds due to equal ten percent of the total contract purchase price in the event that you are the successful winning bidder and that you are completely comfortable with the auction process.
Register to Bid
In order to be eligible to bid at one of our auctions you must either: (a) if you are represented by a broker / agent then your broker / agent is responsible for completing and submitting to our office a Broker Participation Form to pre-register you no less than 24 hours prior to the auction date and (b) if you are not represented you may either pre-register yourself with one of our team members prior to the auction or you may register at the auction site on the day of the auction.
All of our property auctions require a monetary deposit in the form of a cashier’s check made payable to Yourself. As the amount of the registration deposit varies by auction it is important to review the Property Information Package for the property that you are interested in to determine the established deposit requirement. Please bring your cashiers check with you to the auction site in order to finalize your registration and to receive your bidding card and detailed bidding packet.
In the event that you are not the successful high bidder on auction day, your cashiers check is immediately returned to you. If you are the successful winning bidder on auction day then the full amount of your cashiers check will be retained and applied toward the 10% total contract purchase price. You will then need to provide the difference by cash, cashiers check or by personal* / company check*.
**Personal or Company check will only be accepted if it is accompanied by an Official Bank Letter of Guarantee from your financial institution. Please contact our office for specific requirements.
Closing of Escrow
In most cases the terms for a successful close of escrow for the property purchased through one of our auctions is 30 days from the date of the auction. For example, if the auction is conducted on January 1 then the closing of escrow will be by the close of business on January 31. If you would like to close prior to the scheduled close of escrow date then this acceptable. Please be aware that if the property does not close successfully by 5:00 PM on the scheduled closing date then this will result in a default on the purchase contract and the full deposit will be forfeited.
SELL / Selling Real Property at Auction
Auctions Draw Attention
Our professional proprietary marketing system creates a worldwide marketing campaign for your property. Exposure is improved far more extensive when compared to conventional listing efforts. Our program reaches thousands of qualified prospects not only in your property’s area, but also additional bidders worldwide.
Urgency to Buy is Created
When the advertising campaign for your property commences buyers will know immediately that you are committed to selling. This will let buyers understand that they must buy your property or risk not having a chance to purchase it later on.
Qualified buyers will be forced to compete openly and aggressively to obtain your property. Many times this creates such an urgency to purchase your property it is more likely buyers will pre-submit bids that may result in a sale of your property before the auction even takes place.
Sell Your Property Quickly
Maximize the value of your property by ensuring that you do not waste the precious time / value of money. Most often only 3 weeks are needed to market the sale of your property and 30 days or less to close. Auctions are extremely fast when compared to simply listing your property the traditional way, waiting for offers.
Avoid High Holding Costs
The sooner your property sells, the greater your bottom line will be. Avoid and eliminate the many losses from the 15% - 20% annual cost of non-performing loans, thousands of dollars paid in taxes, insurance and maintenance fees.
Value Can Be Demonstrated
A properly marketed and professionally conducted auction will invariably produce the top market price. Unlike conventional sales which set the price up and bargain down, the auction process demonstrates the demand and value of the property while bargaining up!
Quick and Easy Close
A property sells "As Is with No Contingencies." A 30 day close or less is standard in most cases.
No or Low Commission to Seller
The buyer pays most, if not all of the commission through a buyer’s premium. Literally saving the seller thousands of dollars you would traditionally be paying out in commissions through the conventional real estate sales method. You will pay nothing more than advertising costs and you can accept or reject the high bid below what your reserve may be.
Successful Marketing Systems
Our firm utilizes some of the most unique, state of the art and award winning marketing tools to achieve maximum exposure for your property.
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When You Are Ready to Sell Your Property at Auction
The first step in the process is to identify your goals. Why do you want to sell? Is there a time frame that you need to sell the property in? What do you want to accomplish after your property is sold? -
Property Evaluation
Your property will be evaluated in order to determine if it is suitable to be sold at auction. A series of evaluation questions will be asked and answered in order to qualify the property for an auction. The objective of the evaluation is to determine if there is a high probability that the property may sell on auction day. -
Target Market
In the process of evaluation, categories of possible buyers are determined. These are the prospects most likely to purchase the property. This list is determined by the property’s value, who can afford it and what the possible uses are.
To help maximize the exposure of your property we also pay commissions to licensed real estate brokers / agents who help market and find buyers for your property. -
Written Proposal
Prior to making any decision you will be presented with a written proposal for review and any questions that you may have will be addressed. You must be completely confident that selling by auction is the best method to sell your property before entering into an agreement. -
Property Information Package (PIP)
In order to answer bidders’ questions about the property, considerable time and effort are spent compiling information about the property including legal documents, Transfer Disclosure Statement (TDS), additional disclosures (if needed), inspection reports, CC&R’s (if needed), HOA’s (if needed), prelims, floor plans, photographs and any other special or pertinent information for the property. All sellers are required to complete, sign and date a Transfer Disclosure Statement for the subject property.
The Property Information Package is used to build buyer confidence so they will offer the fair market value for your property on auction day. It is also used to properly disclose any defects, as well as to enhance the positive attributes of the property. -
Reaching the Market
Advertising is one of the essential ingredients to the success of the auction. It is directed to the target market and the public in general. We use survey results of past auction attendees to determine how to reach prospective buyers based upon the type of property being offered.
The advertising campaign normally includes a combination of direct mail, internet, signage, newspapers / periodicals / magazines and telemarketing. Our surveys have proven that the majority of auction buyers are attracted by one of these sources. -
The Auction Event
Most of our auctions are held on site or at a nearby location that is environmentally controlled in the event of inclement weather conditions. On occasion we may also choose to sell from one central location if there will be multiple properties and / or land tracts selling on the same day.
Buyers are required to register in order to participate in the auction. They must agree to the terms and conditions of the auction outlined in the Property Information Package, sign and date the bidding card agreement and submit the predetermined deposit prior to having the ability to bid at the auction.
An auctioneer will read the terms and conditions for the auction and commence the auction. In most cases the bidding will be live although we may also selectively conduct online only or simultaneous live / online auction bidding with certain properties when we determine this will be the most effective method. At the conclusion of the auction the winning bidder will execute the Purchase & Sale Agreement and provide the remaining deposit to REAA or to the Escrow Representative accordingly. The buyer then has 30 days or less to close the transaction through escrow. -
Follow Up and Closing
Escrow will coordinate and manage all aspects of the closing process for all parties involved with the transaction. A detailed summary report including advertising samples and a full accounting will be provided to the seller at the time of closing or as required by the Department of Real Estate, whichever comes first.
