auctions

[Courtney Jones]

I came across this post .  .

website. No minimum starting bid required. All auction properties are subject to a 5% buyers premium with a minimum of $2,000 and subject to a reserve price as well as seller confirmation. Total commission paid on auction properties is 5% of the contract sales price: 2.5% to the listing broker with a $1,500 minimum and 2.5% to the cooperating broker with a $1,500 minimum. No other incentives apply. Does then mean when you purchase something from auction,you cannot have a loan,it must be cash? I cant see how you can have a loan if you dont know what the final price is going to be. Can anyone enlighten me?

[Account Closed]

• As an auctioneer, we sell properties for all cash in as is condition. If you want to bid on a property you should;
• have your cash ready - get a credit line, talk to your well-off uncle, borrow against your home equity....etc.
• know what you are bidding on; the value - don't guess - be RIGHT ON to the penny!
• try to get inside to look at the houses; some owners are not happy with being displaced and may take the drywall with them, dispose of their left-over cement in the commode, store their tennis balls in the sewage vent pipe, forget to turn the bathroom  spigot off when leaving the house or sell the copper that usually supplies the water and heat.
• At a foreclosure auction, most of the time you can't get into inspect.
• After you are the successful high bidder and settle, you my have to file a suit to evict the owner or tenant or squatter.

OK - ENOUGHT WITH THE NEGATIVE! Some suggestions:

• Attend seller or investor auctions -- could be a motivated seller and may listen to owner financing terms.
• Call the auction company to ask them if it is bank or seller ordered
• Have your money ready
• Understand the terms,
• Is there a Buyers Premium, how much, who pays settlement cost, is it negotiable?
• Is there interest on the unpaid balance from the date of sale to settlement? (this could get expensive....especially if the settlement is delayed)
• When you are at the auction, stand parallel to the auctioneer so that you can see who is bidding on the property.
• At time unethically auctioneer will make up bids just to get the bidders to bid against themselves. (it happens!)
• Don't be shy about asking the auctioneer who the bidder is (they won't tell, but that is a warning to them that your know what's happening. It will slow down the process.
• Be it known that auctioneers know how to sell! You need to know how to buy.
• Don't get into a bidding war, don't go above your price, WALK --- there will be another auction tomorrow.
• Try to get immediate possession If the property is vacant - time to fix up and flip or rent
• Start settlement immediately, call your title company.
• Read the auction contract before bidding
• Understand all your charges
• Add in to your cost; commission, settlement cost (both sides), holding interest cost, title search and title insurance, insurance, repairs, taxes to be paid in advance.
• No sale? Great - go find the owner and negotiate a deal
• Foreclosure? No sale - great - find a decision make at the bank, talk to the trustee, find the owner (because if it is a foreclosure - the bank does not own it yet - they have to go through a ratification period, this could take months - time for you to negotiate with the seller, object to the foreclosure on technical mistakes and to negotiate with the lender for an assignment of the mortgage.)

This is a wonderful business, have fun, be kind to others - don't be greedy - there is lots of profits to be had for the prepared investor. Charles