I attended a real estate auction recently. It was a Williams & Williams auction and I must say it was interesting. I thought I’d share some details.
First I didn’t need to give the deposit to participate in bidding. However if you win the bid you must give the deposit for them to accept your bid. You can also participate via online bidding, where you first must give a credit card and get registered.
– The deposit is 5% or $2,500 deposit, whichever is less
– There is a 5% buyers premium
– Buyer has 35 days to close on the property
– Seller has 1st right of refusal up to 14 days
– Seller pays title insurance, back taxes and liens
– Buyer gets a clean insurable title
– Property conveys “as-is”, no inspection contingenices
– Contract is not assignable
There was a good amount of people there and some properties were being bid up to prices higher then a savvy investor would pay. It was clear that emotions got involved and perhaps people paid more than originally planed.
Most homes auctioned of, were out of my area and I didn’t buy anything. But it was an interesting experience.
Russ,
Thank you for the information. I have not been to an auction yet, but I am also looking forward to watching the process.
It is funny that you noticed some prices being bid higher than what a savvy investor would participate in. I attend auctions for antiques and sometimes items are sold higher than expected and I think ego takes over and it becomes about winning the bid. Not advantagous for an investor!
Take care and talk to you soon.
Jayne, I completely agree with you. Mixing Egos, Emotions and Investing is asking for trouble.