October 3, 2011
Myth 9 – All auction companies are the same, and all auctions are run the same.
Make sure you read the terms and conditions for each auction and that you call the auction company to ensure that you understand their use of specific terminology.
There are many variables that should not be assumed to be the same for every company. One example is that some companies utilize a percentage of the high bid while others utilize a flat amount for the deposit on auction day.
Other considerations are licensure and continuing education within the real estate and auction industry. It is important to work with auctioneers who are committed to their industry. Several questions to ask a prospective auctioneer or auction company are:
Are you actively involved in the National Auctioneers Association? Do you have additional certifications of industry related education such as Certified Auctioneers Institute, Accredited Auctioneer of Real Estate, Auction Technology Specialist, etc?
It is my opinion that we should never stop learning, and never stop striving to be the best that we can be. This is the only way that we can ensure that we are always on the cutting edge, and suited to help our clients in their time of need.
There are a lot of great auctioneers and auction companies out there to choose from. Understanding the differences between them can help you find a provider who is a good fit for you and your specific needs.
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.
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.