How to Bid at House Auctions

A house auction may be held by either a third-party auction company or by a city or county court. Some house auctions use paddles for bidding while others use a raised hand. The number of bidders at the auction sometimes determines which method is used. No matter what the method, it's crucial to understand the procedure and to become a registered bidder who is eligible to bid for the house.

Instructions

1. Set a budget for your bidding. If you are bidding on a house that is being sold by an auction company, find out how much the seller's premium is. In many cases, the premium will add 10 to 15 percent onto the final bid price for the house. If you don't have cash available for the house purchase, find out how much of a loan you qualify for.

2. Register with the auction house if the house auction is being sponsored by one. In most cases, you can do this on the day of the auction by showing up early and filling out the paperwork. Some auction houses require that bidders be qualified earlier. Call the auction house or bank that is sponsoring the auction to find out

3. Bid only after doing research on the property. This may include getting a home inspector to check out the property or having the house tested for lead paint. The auction administrators will not be able to answer questions about the overall condition of the home, and if they do offer answers, they may be based only on the wish to make the sale and without the benefit of a home inspection report. Auction companies generally advise that bidders visit the home and conduct any needed tests before the auction day arrives.

4. Arrive to the auction site early to get any last-minute instructions. Some house auctions are held at a local courthouse, some are held inside the home to be auctioned and some are conducted on the steps of the local courthouse. Some auction houses require you to read through and sign their list of procedures before bidding.

5. Find out the exact bidding procedure. If the auction turnout is very small, some auction houses will allow bidding simply with a raised hand. In most cases, however, each registered bidder will be given a numbered paddle. In some auctions, bidding is done by raising a paddle to bid each time you wish to raise the bid price to the price that is called out. A less widespread method is for all bidders to raise their paddles and for the auctioneer to call out increasingly-higher bids. Bidders put down their paddles if they can't meet the bid price and the last paddle in the air signifies the winning bid.