10 Myths of Real Estate Auctions – Myth 3

June 15, 2011

Myth 3 – I won’t get free and clear title on the property or the owner might take the property back from me after buying it.

This myth is based on the traditions of court house step type auctions, commonly referred to as sheriff’s auctions or tax lien sales. In this scenario the owner has a legal remedy to get their property back called a “redemption period.” Each State will have a different time frame for the redemption period.

Most auctions conducted by professional real estate auction companies are not these types of auctions, and redemption periods are not part of the terms and conditions.

In fact, most public real estate auctions conducted by a professional real estate auction company will include in the terms and conditions of the auction that the seller will guarantee title. Title work is performed in the same manner as a traditional transaction, and in most cases, the seller is responsible for the cost associated with the policy. (although this will vary from company to company)

It is always good to check the terms and conditions of the auction and make sure that you have a clear understanding of what the terms are, and how they will affect you as a buyer.


10 Myths of Real Estate Auctions – Myth 2

May 31, 2011

Myth 2 – The property is distressed, something must be wrong with it & I won’t find out until I buy the Property.

It is true that one of the primary reasons a Seller will choose the auction method of marketing, is the benefit of selling the property “as-is,” without contingency upon inspections.

However, this does not mean that the condition of the property is being hidden from the potential buyers. In fact, a reputable real estate auction company will use disclosure forms and encourage the seller to disclose all known defects or issues with the property.

In addition to encouraging full disclosure, a reputable real estate auction company will also give ample opportunity for inspections prior to the auction. This allows the potential buyer to make a determination of value based on their own inspections, or an inspection from a hired professional.

As real estate auctions have continued to grow in popularity, more and more sellers are taking advantage of the benefits of auction, and are considering the auction method of marketing as a first choice, not a last resort.

While it is common to see bank owned real estate auctions of distressed properties, you will also find that luxury homes, unique properties, bread and butter suburban homes, and a variety of different properties are sold at auction every day.


Alabama Auctioneers Association

May 23, 2011

I am looking forward to attending and presenting a couple of seminars related to auction technology at The Alabama Auctioneers Association annual convention coming up June 5th through the 7th in Orange Beach Alabama.

In addition to having the opportunity to catch up with friends as well as make a few new friends, I will also have the opportunity to spend time in some very beautiful country.

It will not be my first trip to Alabama. When I was in my twenties and at the end of my service in the Army, I was looking for a decent used car to drive from Hinesville Georgia, where I was stationed, back home to Las Vegas Nevada.

A friend of mine had a brother in law who owned a used car lot in a small town in Alabama. I don’t remember the name of the town, but I remember the gorgeous country we drove through to pick it up.

After hours of driving and $700 I was the proud owner of a well used Dodge Dart. The car served me well for my journey home, as long as I fed it a quart of oil every time it needed gas, it was fine.

I have some fond memories of that drive home, and hope to make a few more on this trip to the great state of Alabama.


10 Myths of Real Estate Auctions – Myth 1

May 16, 2011

Myth 1 – If I buy a property at auction I will have to produce the total amount of cash on auction day.

Not all auction companies utilize the same terms and conditions, so make sure as a buyer you have a complete understanding of the terms and conditions of the auction.

Most public real estate auctions require a deposit on auction day, and allow 30 days for closing.

The deposit will usually be a flat amount, or a percentage of the total contract price.

Although the majority of the properties that are sold at auction are sold with no contingency, including financing, the 30 days to close allows for most buyers to utilize financing and purchase a property at auction without having to have the entire amount in cash.


The Burn Pile

May 2, 2011

During my service in the Army I spent most of my time in South Korea. My last duty station was at Ft. Stewart in Hinesville Georgia.

While in Georgia I had the opportunity to pick up a few side jobs working with a friend who had been in the area for some time, and had a knack for finding extra work.

One particular job involved moving construction debris from a large pile the size of a semi trailer away from the house that it was removed from, and into a field where we could then burn the pile. We worked for several hours and managed to get about a third of the pile moved into the field and decided to burn this pile and call it a day. We would return another day to move the remainder.

It didn’t take much to get the fire started. Most of the items that were in the pile were removed from a 100 year old plus home and were extremely flammable. This included doors, trim, wall studs, flooring, wall board and more.

At first we stood a few feet from the pile and basked in the glow of our accomplishment. After a few minutes the fire grew much larger and we found ourselves inching back to avoid being burned. Within 15 minutes we were standing at least 20 feet from the fire and feeling the heat pretty good.

Everything seemed to be going well until we noticed that the grass around the burn pile began to catch fire and was spreading slowly outward. My friend, who I should mention was senior in rank, decided to grab the garden hose to water the grass in hopes of keeping the fire from spreading.

The water output was nowhere near capable of getting the job done, and the fire was now working its way to a wood fence which was very close to the new house we were moving the pile away from to protect while burning.

In a flash I remembered an incident that happened while working range duty as a medic in South Korea.

It was during the summer, and someone had left a tracer round in a 50 caliber belt. This was not allowed when weather was dry as tracer rounds are really good at starting forest fires. Sure enough, one round started a fire and within minutes the range was shut down while over 50 of us attempted to put out the fire.

We worked for 30 minutes in a futile effort when a truck with 10 South Korean Firefighters showed up. They walked up to the scene casually, surveyed the fire and dispatched in a line to battle the fire. Within minutes, armed with only picks and shovels, they had the fire contained and sat on the hill eating their lunch while the fire extinguished itself. It was impressive to say the least.

Back to present day. This knowledge was very helpful. We grabbed a couple of shovels and worked our way around the spreading fire digging a shallow trench. Pretty soon we had control of the situation and exhaled in relief.

As we drove away, we were both very grateful for those South Korean firefighters and how experiences can a huge difference in someone’s life. It sure made a difference in my life, and I am very sure it made a difference in that homeowner’s life.

Remember, Life is Good.