Adam’s Auctions specializes in Live Online Only Auctions.
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Buying Real Estate
How It Works
The thought of buying property at auction scares many people… it doesn’t have to. Buying property at auction only means you, the buyer, need to be aware of a few things.
Following is an overview of the Buying Process and some things you need to be aware of as a buyer of real estate at auction:
- Items sold at auction are sold ‘As Is’, ‘Where Is’. This means that, generally, the property has not been inspected by local code enforcement and may not be ‘up to code’. However, some of our auction properties have already passed the local code inspections, so pay attention to our marketing fliers to see if this applies to a property.
- Because they are sold ‘As Is’, you need to do your ‘due diligence’ prior to the auction. Items that might be worth checking include square footage, lot lines, city or county jurisdiction, sewer status and access, just to name a few.
- Most properties are offered ‘with a reserve’ meaning the seller has a minimum amount that they hope to obtain for the property. The final high bid amount will be subject to the seller’s approval or rejection.
- If an auction is advertised as “Absolute”, there is no reserve amount. This means the property will sell no matter what amount it brings.
- Feel free to speak with the auctioneer or auction company staff at the open house / property viewing or before the auction to make sure you understand how the process works or to submit any questions you might have. We are here to help you in this process and to simplify it for you.
- A “Buyer’s Premium” is charged to you, the buyer. This is the auction company’s commission and is a percentage that is added to the high bid amount. If the high bid is accepted by the seller, this percentage will be added on to the high bid to create the total sale price you will pay for the property. Check each property flier for the buyer’s premium applicable.
- The winning high bidder must put down an “Earnest Money Deposit” which is non-refundable and will be held by the title insurance company until credited back to you at closing.
- If the seller accepts your high bid, an Auction Sales Contract will be signed by all parties immediately.
- The transaction will close through a local title insurance company within 30 days of the auction date.
- You are guaranteed clear, clean title to the property, free of all back taxes, mortgages and liens. If the seller cannot produce clear title, your earnest money deposit is returned to you.
- At closing, you will be handed the keys to your new property!
Getting Ready to Buy Real Estate
If you are going to bid on a property offered at an online only auction, the following items must be done by you:
- Financing must be in place if you will be getting a loan to purchase the property. Discussions with a lender need to occur prior to an auction and pre-approval must be in place. The lender should be as far along with the loan process as possible without having an actual sales contract in hand.
- Be aware that NO contingencies are allowed with an auction (no financing, selling another property or inspection contingencies)
- Cash must be in place if you will be paying cash for the property.
- Earnest money deposit must be ready in the form of a personal, business or cashier’s check.
- Due diligence on the property must be completed to your satisfaction, as the property will be sold ‘As Is’, ‘Where Is’, with no inspections or repairs by seller.
- Think through the price you are willing to pay for the property prior to the online only auction and be prepared for fast paced bidding to occur, with the need for quick decisions to be made.