As a real estate auctioneer, it is imperative that I secure the highest bid possible. The seller of the property is my client, and my business depends solely on my ability to get buyers to the auction, and to entice them to bid on the properties we are offering. It sounds easy, but its not.
With so many foreclosures, short-sales and REO properties being offered, auctions don't fire up the enthusiasm as much as we would like. But if you find yourself at an auction, here are some tips:
1) If an auction is advertised as "Absolute," the property will be sold to the highest bidder, at any price. These properties always attract the most bidders, because the property will be sold, regardless of price!
2) If a property is not advertised as "Absolute," it is, by default, an auction with reserve. The word "reserve" is ofter misunderstood, but what is actually means is that the seller reserves the right to bid, thus the reserve price is the bid of the seller.
3) Even if you don't meet the reserve with a bid, there is still a chance to make a deal on the property. Many times. we are able to come to a meeting of the minds with the sellers. buyers, and auctioneers all giving a little to make the deal happen. Many properties are sold within one week after the auction.
4) The words "Opening Bid" and "Reserve Price" have nothing in common. The words opening bid have no meaning, other than to speed up the timing of the actually call by the auctioneer. This usually applies to "Minimum Bid" as well.
5) If an auction is NOT absolute, the auctioneer can accept or reject any bid. If the auctioneer is calling for a hundred thousand dollars and you offer seventy-five thousand, he may choose to accept or reject your bid. Many times, you can judge when you are approaching the reserve price by the call of the auctioneer. The auctioneer is more likely to accept smaller increments when you are close to the reserve price!
These concepts vary from state to state, and we are specifically referring to auction law in Georgia. Always feel free to call the auctioneer prior to any auction to discuss the specifics of the auction. Read the terms and conditions of auction carefully. as it will become a contract if you are the successfully bidder. Be prepared and have fun!
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Richard:
As a fellow auctioneer --- I always give a small Itutorial to the individuals that are looking to bid on any of the homes that I am involved in----- on how to bid on a home and to understand that there are differences to Absolute and opening with a minimum bid offer. Also, another is seller confirmation here in California.
Good Post.
Richard,
Thanks for the tips...I have bookmarked for myself.
John:
We never take just ANY house for auction. The property must be a suitable auction property. It must have unique and compelling qualities that would support multiple bids. If a property is a GOOD auction property, we can pull more than market. If it's a house in a subdivision with 20 other homes for sale you's be lucky to get 50% of market!
Google works...I was looking for ideas about real estate auctions to include in my summary of my recent auction experience with my buyer (who choked...again) and here you were right on the first page!
Interesting Article Richard. Thanks
Dave Williamson
American Mortgage and Equity Consultants
www.davepwilliamson.com