Whether you have made the decision to purchase a property at a real estate auction or just have some questions about how it works, here’s some insight into the process.
Preparation is Key
Preparing yourself for the auction is important to your chances of earning the winning bid. The preview period prior to the auction is the time for you to get questions answered, attend open houses, and determine what you can afford to spend. The actual auction is simply the time to offer the price you are willing to pay for those properties.
Be Ready to Bid
First-time attendees are sometimes surprised to learn that the sale of each property only takes a few minutes. In many cases, if the auction is for a collection of homes, the entire process lasts less than one hour. You should plan on arriving at the auction one hour early so you are ready to bid.
All prospective bidders must register to attend and bid at the auction. Registration is available during the preview period before auction day and only requires filling out a simple form. On auction day, pre-registered bidders check-in for their bidder package. The registration period usually begins about two hours before the scheduled auction time. There is no penalty to register at the auction site but auction day registrants may be limited to purchasing one property. High bidders will use cashier’s checks plus personal checks for their down payment.
Just Before Bidding Begins
The auction begins promptly at the appointed time with opening remarks summarizing the terms of sale, the methods of bidding and any final changes or disclosures. These comments usually take only a few minutes, concluding with the auctioneer conducting a practice auction.
The Auction Team
Assisting the auctioneer will be professional floormen, which ensures that anyone bidding is recognized and that all bids are relayed promptly to the auctioneer. These professional also assist with questions before and during the auction, including asking the auctioneer to pause if necessary. It is a myth that bids can be made accidentally, by scratching one's nose for example. If you did not intend to bid, simply inform one of the staff or the auctioneer and the mistake will be corrected. Any tie bids or other issues regarding who has the high bid are always resolved by the auctioneer, who has complete and final authority.
Start the Bidding
From the first to final bid, things move smoothly, with bidders offering their bids up to the price they are willing to pay. The auctioneer can and will say "sold" or "high bidder" as soon as he or she determines the final bid has been made. It is customary for the auctioneer to slow things down near the end of the bidding to announce, "Going once, going twice…third and final call" That is your cue that the auctioneer is preparing to announce, "Sold" or "High Bidder."