How Does a Property Auction Work?

Contact an Auction Agency

An auction agency will be able to give you listing and preview dates of upcoming properties that are slated for auction. If you want to sell your property via an auction, then you will need the agency to determine the starting bid. You will also need them to do the advertising for you and to get your house sold in the quickest amount of time as possible. Do your homework on the auction agency to make sure it is a legitimate one. Don't be scared to call the BBB and ask for their opinion on the agency.

Selling Your Property

Contact the auction agency and get started. The agency will draw up some documentation about the sale of your home that you must review thoroughly and sign. It is recommended that you have a real estate attorney review the documents before you sign them. Your property will receive a date for an auction as well as 2 dates for prospective buyers to preview the property. The auction agency will set up the necessary inspections as well as an appraisal. Using this information, the agency will choose a starting bid for your property. The highest bidder on the day of the sale wins the property.

Buying a Property up for Auction

Potential buyers must register for an auction ahead of time. Usually within at least 24 hours of the beginning of the auction. On the day of the auction, buyers have to check in by showing his photo ID and any cash deposits that would be needed if he were to win a bid. It is also helpful for the buyer to bring in letters to prove that they have a lender who is willing to give them the rest of the money they need. The properties are sold as is. The auctioneer starts off the bidding with the lowest amount it is willing to sell bi the property for. Bidders (potential buyers) must then bid higher. The highest bidder wins the property. The winner must then complete the paperwork and hand over the deposits.

Use of Real Estate Agents

Using a real estate agent is not necessary in property auctions. It can be extremely helpful, however, because the real estate agent is knowledgeable in the contracts and can advise you if anything needs to change. You can also send a real estate agent as your proxy to do the bidding for you. This is called absentee bidding.