Property buyers and investors are always looking to get in on the act at auctions to secure ownership of choice estate properties. If you’re the vendor at the auction, it’s essential to know what to expect. Even if you’re on the verge of making the decision and are weighing your options on whether or not to sell via auction, it’ll do you some good to know what to expect. Here’s what to expect when the auction gets underway:
Registration
Before the bidding starts, registration is essential to avoid false identity and fraudulent activities. Most registrations are done using a valid means of identification, like a driver's license. This way, the auctioneers can verify the bidders’ information.
Most auctioneers require bidders to register online weeks or months before the auction. However, a few allow registration at the site of the auction.
Physical inspection
Real estate auctions involve an inspection period where bidders and intended buyers inspect the property. Inspections enable bidders to check for problems with the said property and if it meets their expectations. If the property inspected does not meet their taste, they can back out and withdraw from bidding.
Bidding
After registration, the vendor will hand out a bidders package containing a card with large numbers written on them. The numbers also help to identify the individual bidders and avoid confusion after the auction gets underway.
Sometimes, absentee bids are allowed for remote bidders who will have presented their offers to the auctioneer beforehand, often in the form of a check. During the auction, the check is destroyed if their offer is outbid. After the auctioneer is introduced, they will announce that the auction is now open and name the start price. The bidding can commence.
Vendor bids
These are bids the auctioneer prices and must be below the reserve price. This bid is declared before the auction itself begins.
Advances and rises
You can also expect to see rises and advances at estate auctions. This refers to the amount by which the bids are increased. Note that auctioneers can reject bids if they feel that potential buyers have not advanced the bid significantly.
On the market and passed in
This refers to a period during proceedings when the auctioneer pauses to seek instruction from the seller and discuss the bidding process. Here, you can debate whether to adjust your reserve price or sell to the highest bidder. The property is declared to be “on the market.” “Passed in” means the bidding has not reached an acceptable price. In such cases, the highest bidder often gets the first preference to negotiate a sale with the seller.
When the auctioneer calls out the prices and no one else raises their cards, the last person to bid on the last price stated wins. The last bidder is expected to deposit a down payment after signing the purchase agreement.
Get the most out of your real estate auction
Real estate auctions are, no doubt, a unique experience. But if you’ve never done or been in one before, the process can be overwhelming. At Magna Auction Company, we can help you navigate the auction process so you can get the most out of it. Contact us today.