How to Auction Land
An auction is great way to buy or sell land as the auction itself helps to define the price. Auctions allow interested parties to bid on an item without even attending the auction (Absentee Bids) or submit confidential bids (Sealed Bids); however, most auctions are won by the highest bidder in the room (Absolute Auction) without any restrictions or limitations. Catalog Auctions are held in a location other than where the property is kept; most land auctions are Catalog-Absolute auctions. That is, they do not take place on the property and the highest bidder wins the prize. The only restriction is the reserve (minimum bid amount) set on the property.
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Instructions
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Register your land with a land auctioneer. Contact a local auctioneer or register with an online land auction website (see Resources section). The auctioneer will require a brief description of the land for the catalog.
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Set up a time for interested parties to view the land prior to the auction day. They will want to inspect the property and may even hire an appraiser.
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Provide a starting bid or reserve price for the auctioneer. Bidding may start below this price; however, you are not obligated to sell unless the final bid meets reserve.
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Request an immediate deposit from the winner of the auction. This can be in the form of cash, bank draft or credit card. Buyers are usually informed of the method of payment accepted prior to placing bids or inspecting the land. In general, a 20 percent down payment is expected.
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Stipulate the length of time the highest bidder has to pay the remainder of purchase price. Don't forget to add local taxes and possibly a buyer's premium to the final sales price, if additional fees are needed to transfer ownership. You will be expected to relinquish the deed of trust roughly 180 days after the date of purchase.
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References
Resources
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