Know The Property
The Law, and The Auction Company.
When you go to an auction, it’s the responsibility of the auction house to make sure the property is accurately described.
What you must do is make sure that you have a good understanding of the property. If the auction house doesn’t have a property report for you to look at, make sure to ask for one, or for information in a written report on the property.
Magazines that explain the ins and outs of buying at auction are also helpful, as are the web sites of auction houses to familiarize yourself with the auction process and different terms you’ll come across.
A good auction house, although not legally required to do so, will provide an inspection at the property for buyers on the day of the auction. If they don’t, be prepared to conduct your own inspection before the auction.
Research the property, the law, and the auctioneer before you make a purchase.
Get Familiar With Auction Process
When you buy property at auction, you’re joining a number of other bidders all trying to win the auction. Typically, you get no prior knowledge of who is bidding against you, unless you are at an open auction with a live audience. But even then, you don’t know the identity of the other bidders. You will also get no information about the property itself.
With other types of property purchases, you can see the property first and usually get details about it. But when you buy property at auction, you’re not able to do these things. If you’ve never bought property at auction before, it’s a good idea to visit a few auctions and see one or two auctions up close. You don’t need to actually bid, but it’s a good way to familiarize yourself with the process.
Have a Talk….With Yourself
If you have a winning bid at an auction, there’s a lot of paperwork to be signed, the result of an auction house’s diligence. So be warned, if you’re planning to bid, “buyer beware.”
Home ownership holds a great deal of responsibility. And so do auctions. Because they often result in a “blank check” situation for home owners, it’s essential that you do your homework.
Contact the auction company immediately and be prepared to ask some challenging questions, at least if you’re serious about bidding and winning the home. The auction will be conducted by a real estate professional, a member of the local real estate board, a licensed attorney, or some other commissioned real estate professional who has been trained and is experienced in this area. An auction professional can explain the bidding process to you and give you a better idea of what’s involved in buying property at auction. Be sure to ask about:
- the seller’s motivation for selling at auction,
- your options for property inspections,
- the need to prepare title documents,