auction-photo     I’ve heard a rumor recently that a few of the large REO Banks are going to be putting their inventory straight to auction rather than listing with Realtors. There is definitely a rise in the auction buying which is currently up to about 40% of sales before auction date as compared to the usual of 25 to 30 per cent pre-sales.

     According to Hudson & Marshall, one of the largest auction dealers, the following are some guidelines to help you with the process of buying an auction home. There is usually a time period of two to three weeks before the auction that offers can be accepted and a majority of them are accepted at less than list price.

All offers must be accompanied with certified funds (certified to cash) and not contingent upon financing.  

If the home is being purchased through a corporation, then the articles of incorporation must accompany offer.

All offers are subject to sellers approval

Don’t forget that there is usually a 5% premium on top of the purchase price.

If you are submitting multiple offers, you must have multiple earnest money deposits in certified funds.

At auction there is not a starting price but there is a reserve price that must be met.

It is always the buyers responsibility to perform their due diligence before making the offer, such as inspections, market comparable, etc. There are no contingencies and properties are sold “AS IS”.

It is very important for auction buyers to be educated and informed regarding the real estate auction process. Make sure all your questions and concerns are answered before you attend an auction.

Any real estate broker or agent may represent a buyer at auction.

For additional information Hudson & Marshall have a great FAQ section on their website.