Multi units brought at auction

[Wave Taylor]

There is an auction house in my area and they have a lot of small multi-units up for action. Anyone ever buy a property from an action? Does anyone have any insight on that process?

[Ned Carey]

@Wave Taylor Depending on the auction house one of them might be mine :-)

Buying a multi family at auction is not really different then buying any other property at auction. Often you can make an appointment to inspect the property prior to the auction. Then on the auction day the house is opened up for inspection 15  min to 30 min before the auction. 

The auctioneer will read the terms of sale and then the bidding starts. The terms of sale should be in  the advertisement before the auction. Generally you will get free and clear insurable title. The seller is responsible for all bills before the auction and  you are responsible for all after the auction. However be sure to read the terms of sale, the preceding statement is not necessarily true. ( I am talking public auctions on site, not courthouse step foreclosure auctions, they are a  different animal)

To bid you will be expected to put down a grand or two usually in certified funds. Just show them you have the check when registering for the auction. You only give it to them if you win. AJ Billig in Baltimore usually asks for 10% of the bid and says you have to bring them a check by the end of the day to bring your deposit up to that amount. 

Most auctions will expect you to settle on the property in 30 Days. This means you need to have your  money lined up. It is not reasonable to expect to get a loan on an auction property in 30 Days. There is no contingency for inspection or financing. I you win the bid you are expected to settle period. If you don't you will lose at least your deposit.

Some auctioneers charge a buyers premium added to your bid as their commission Alex Cooper, Auction Brokers and Ashland Auctions usually do it that way. AJ Billig charges the seller with no buyers premium.

I recommend yo go to some auctions. It will be a learning experience.