You should know as a buyer that when an auction is conducted by reputed companies, such as RDG Property, you will be provided with a list of information that you need to prepare before the date of the auction. When you are reading an ad about an auction, make sure that you know what an absolute auction and reserve auction means.
Reserved auctions are the auctions where the sellers can reject the final bids if the highest bids are not high enough to satisfy the sellers.
Absolute auctions are auctions when the sales are awarded to the person who bids the highest.
Getting Ready for Auction
When you are going to buy a property through auction, you should always do your homework correctly, or do your due diligence perfectly. Here are a few steps that are recommended:
- Read about the property
You need to study all the information that is available on the property. Auction property page has all the details about acreage, size, location and many other aspects of the property. You can also go through the property brochure available online, and you ask the company to mail the property brochure to your address.
- Don’t forget about property information packet
The package will have many details that are helpful, such as floor plans, inspection, seller disclosure, zoning information, demographics, and maps.
- Visit the property before auction
Viewing the property yourself, there’s no substitute for it. There will be professionals from the company who is auctioning the property; they will give you a guided tour around the property and reply you if you have any questions about the process of auction and even on the property.
- Arrange Finance
You will need to make finance available before the auction begins, so make the necessary steps so that you can have your finance ready by then.
- You can decide whether you want a real estate broker to represent you
It isn’t a necessity to hire a real estate broker to represent you, but if there’s a real estate broker who is working with you, you might want them to attend the auction.
On the Auction Day
Make sure you reach the auction spot at least 45 minutes before the auction is scheduled. You need to do Bidder Registration if you haven’t done so till then, then collect the Bidder Packet, make a final visit to the property and ask questions if you have any.
At the time of the auction, the representatives of the company will be there to replay your bids to the auction, and they will also reply any questions you have when the bidding is going on.
If you have won the bidding, Congratulations, then you will be taken immediately to the closing room where all necessary documents will be completed. The transaction will be smooth. At most, it will take around 30 days to close off everything.
Pros of Buying Real Estate at Auction
- Potential Price Break
As the process of the auction is carried out through biddings, therefore, there’s a big chance that the property will be sold at a discounted rate. Mostly the auctions are done on an absolute basis not on reserve auction give you the better option of making a saving. To a defined bidding period with an end date that states, this kind of auctions limits the price competition. So, the sellers won’t be leaving their properties on the market for a long period and wait for better offers or market changes that might increase the price of the home.
- Access to Desirable Properties
Sometimes auctions are used to make customers interested in new projects, such as condominium building. In such cases, the prices of the building are going to rise significantly in the next few months or years, and so a bidder has an opportunity to buy those properties.
- Settlement is Fast
Buying from auctions makes the settlement quick. Before luxury property auctions take place, predefined termed and conditions are laid by the auction company and seller, and so there’s no room left for negotiations after someone had bid the highest bid. In a short time, all the formal works needed are complete, and the property is transferred to the name of the highest bidder.
Cons of Property Auction
- One biggest drawback is that most of the auctions are cash sales. So, the buyers need to arrange the funds before the auction. But this can also act as an advantage because sometimes quality bidders cannot arrange the funds, and so the competition gets lesser.