| Q. Let's start at the beginning: What exactly is a real estate auction? |
Great question. According to Real Estate Principles and Practices by Philip A. Benson and Nelson L. North, an auction is “A public sale to any person bidding the highest price, upon terms and conditions previously announced.”
That’s the textbook definition. We like to add that an auction is a highly effective method of buying and selling, in an accelerated time frame, with distinct advantages for buyers and sellers.
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| Q. So what’s the event held by RealEstateAuctions.com? |
Quite simply, it’s the best assemblage of properties for sale in one place, featuring single family homes, apartment buildings, commercial property, vacant land and more. |
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| Q. What are the “distinct advantages” mentioned in the first answer? |
For the seller:
For the buyer:
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| Q. How does it work? |
The auction brings buyers and sellers together to transact business in a unique forum that accelerates the process by having buyers already qualified and properties already inspected and ready to close.
Auctions are held regularly Illinois. Registration begins at 10 a.m. Personnel will be on hand to assist people who have come with the intention to bid at one or more of the property auctions. A facilitator will begin the activities by reviewing the legalities and rules of the day.
The contract and paperwork is handled right on site and a closing is typically scheduled within 30-45 days.
Each individual property auction starts with a brief presentation on-screen showing a photo of the property plus relevant facts. This information is also contained in a printed brochure. The auctioneer begins the bidding process and potential buyers indicate their interest at each bid level by raising a numbered paddle they received at registration. When no one is willing to bid further, the auctioneer announces the property “Sold!” |
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| Q. What types of properties are offered at auction? |
Each event varies in the types and number of properties available, but generally speaking, a RealEstateAuctions.com event can include condos, single family homes, multi-unit properties, commercial properties, vacant land and more. |
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| Q. Who owns these properties? |
Primarily private owners, developers and/or lenders. Private owners can include individuals, partnerships and LLCs, among others. Developers may have one or more unsold properties they wish to liquidate. Lenders have properties in their portfolios due to foreclosures and other circumstances.
Generally speaking, anyone who owns real estate can participate in an auction. Our real estate auctions are not limited to banks and developers. There’s a fee and qualifications to meet, of course, but the key point to remember is that an auction is simply a great vehicle to sell real estate because it provides accelerated results, regardless of the property’s history or the owner’s circumstances. |
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| Q. I’m a potential SELLER. How do I get involved? |
Register Online
Use our convenient Auction Registration. An RealEstateAuctions.com Auction Specialist will contact you and provide a Listing Presentation for the property you’d like us to consider. The Listing Presentation will contain Terms and Conditions, a schedule of fees and other details. Our Auction Specialist Realtor® will walk you through each step of the process.
Attend our Free Sellers’ Seminar
Before each auction, we’ll hold one or more free seminars to educate sellers about the benefits and mechanics. The auction will feature single family homes, apartment buildings, condos, townhomes, vacant land, commercial property and more. If you’ve got one or more properties for sale, we’d love to hear from you. Register today! |
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| Q. As a seller, what does my property need in order to be eligible? |
Basically, three things:
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| Q. I’m a potential BUYER. How do I take part? |
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| Q. Tell me more about the inspection process at the properties. |
Inspections are often referred to as “on-sites” and we’re happy to say we offer the best in the industry. The inspections we hold for prospective buyers are staffed by representatives from RealEstateAuctions.com, not outside, for-hire real estate agents. This is important for buyers and sellers.
Typically, three scheduled on-site dates/times are offered before each auction event. Appointments at different dates and times may also be available by inquiry. This is your opportunity to inspect the subject property. Visit more than once, if you like. Gather all the information and details you need to make an informed decision about whether to bid. A Bidder’s Information Packet specific to that property will be available at each location.
When registering to bid on auction day, your registration acknowledges that you have inspected the property to your satisfaction and have reviewed/accepted all the related documentation in the Bidder’s Information Packet. Be informed and be equipped with everything you need to make the best decision. |
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| Q. May I bring a contractor or other professional who can offer me advice about any potential repairs, remodeling, decorating, etc? |
| Yes. |
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| Q. What about a walk-through after the inspection? |
All inspections and investigations must be completed prior to the auction. Ample opportunity is being provided to do this. There are no walk-throughs, punch lists or contingencies after the auction. |
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| Q. What types of auctions will I see at the event? |
Typically, three types:
Sellers have protection with the Minimum Bid Auction and Reserve Auction if they want to be assured their properties will not sell below what they deem acceptable. However, these auctions can be counterproductive if the Minimums and Reserves are set too high, which will discourage bidders. Your RealEstateAuctions.com Auction Specialist can assist with your strategy in this regard. |
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| Q. Can anyone attend the event? |
Absolutely! We all learned about auctions by attending our first as spectators. But please understand we reserve the right to seat our pre-registered buyers and sellers first, followed by spectators, if space is still available. And of course, our events must be compliant with local fire and safety codes regarding occupancy. |
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| Q. Do I need experience or training in order to bid? |
No. However, knowledge is power and we at RealEstateAuctions.com are proud of the education we offer to our buyers and sellers.
For those interested in bidding, we provide a Buyer’s Information Seminar one or more times in the days leading up to the auction event. At these seminars, benefits of buying at auction are explained, procedures are explained, questions are answered and a mock auction is even held to demonstrate the whole look and feel of the event. Be sure to attend one of these seminars if you intend to bid, especially if you are a first-timer. |
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| Q. What’s the procedure at the auction? |
Following check-in, buyers, sellers and spectators will be greeted at the start of the event by a facilitator who will review various terms and conditions, as well establish ground rules for the day.
When bidding opens, a picture of a property will be displayed on one or more large screens in the room. The auctioneer will begin to solicit bids, and buyers will indicate their participation at the given price level by raising a numbered paddle they received at check-in. This is called open bidding. Remember, each sale will be Absolute, Minimum Bid or Reserve and it will be indicated on the brochure and by the auctioneer verbally at the start of bidding for each property.
Using his unique and colorful dialog and cadence, the auctioneer urges the bidding along until it will go no higher. He then declares the property “Sold!” and the winning bidder proceeds to an area just outside the auction room to sign contracts. |
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| Q. Can properties be sold before the auction? |
Yes. The seller might just so happen to get his or her dream offer before auction day and choose to withdraw the property. The seller might also withdraw the property before auction day for other reasons (in both scenarios, fees and terms for the seller will still apply.)
If you are interested in making a pre-auction bid on a property, we can provide the method for you to present your highest and best offer to the seller for his or her consideration. Pre-auction bidding is not a negotiation, or a start-low-and-go-higher process. “Highest and best offer” is the operative phrase to keep in mind if you’d like to make a pre-auction bid. |
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| Q. What will be my total cost if I am the winning bidder of an auction property ? |
You’ll pay a 5% Buyer’s Premium in addition to your bid. Also, if the certified funds you brought do not equal the downpayment, you’ll be required to make up the difference with a personal check. |
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| Q. What’s a Buyer’s Premium? |
It’s the fee required when you are the winning bidder on a property. The winning bid, plus the Buyer’s Premium, adds up to the Total Purchase Price of the property you win.
Example: $100,000 winning bid + 5% Buyer’s Premium ($5,000) = $105,000Total Purchase Price. Your total earnest money required for the transaction (typically 5%) will be based on the Total Purchase Price. Total earnest money required for this example would be $5,250. |
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| Q. What is the anticipated closing time? |
Buyers and sellers benefit from a quick closing schedule. Expect closings to occur no later than 30 to 45 days after the event. |
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| Q. Do I need a real estate broker to represent me? |
No, although if you are working with an agent, he or she must attend and register in order to be eligible to earn a commission. Whether you are a buyer or seller, indicate you are working with an agent when you fill out our online pre-registration form and supply his or her name and contact information. |
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| Q. Is financing available? |
We have a great relationship with Bank of America, the largest bank holding company (by assets) in the nation. If you intend to bid, you must be a serious and prepared buyer. That means ready to close with cash or have financing already pre-approved. We will have a preferred lender available to assist, but be sure to get the financing process underway before the auction takes place. |
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| Q. Can I purchase more than one property? |
Of course. Bring a separate bank check for each property you are considering. |
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| Q. If I don’t close due to financing or other situation, what happens? |
Earnest money will be forfeited. In addition, a seller may seek legal action. The auction, while fun and full of advantages for buyers and sellers, is not a place for tire-kicking. Sellers will have clear title and will be ready to close. Buyers, therefore, should have the properties researched, have financing in place and also be ready to close. |
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| Q. If I register as a buyer but don’t make a purchase, what happens to the certified check (or cash) that I’ve brought with me? |
It never leaves your possession until you are the winning bidder on a property. |
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| Q. Can someone else bid for me, or can I bid for another person? |
Yes. A notarized Power of Attorney authorizing you to bid for another (or vice versa) will be required. |
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| Q. During bidding, can I accidentally purchase a property if I scratch my nose or my head? |
We’re happy to tell you no. Thanks to television and the movies, the impression made to the general public is that any flinch, scratch, sneeze or other movement will obligate you to buy. It makes for great comedy, but it’s just not true. The auctioneer at the podium and his assistants roving through the crowd know what to look for. You’ve got to take very deliberate and unmistakable action with your bidder’s paddle in order for a bid to be recognized. |
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| Q. Can I change my mind and withdraw my bid, or otherwise cancel the transaction after the bidding is closed? |
No. Bidding is final. There is no attorney review process after bidding ends, or a cooling off period. Be sure you are prepared in your bidding by having inspected the property, reviewed all documentation, sought all the necessary professional opinions and have financing in place. |
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| Q. Well, I like what I hear about this event. What’s the first step again? |
Pre-register on our site and we’ll get you started right away! |
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| Q. Let’s start at the beginning: What exactly is a real estate auction? |
North, an auction is “A public sale to any person bidding the highest price, upon terms and conditions previously announced.” That’s the textbook definition. We like to add that an auction is a highly effective method of buying and selling, in an accelerated time frame, with distinct advantages for buyers and sellers. |
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