While real estate auctions may seem intimidating at first, they actually provide a clear, well-defined process for everyone involved. Auctions present an opportunity for buyers to name their own price, while sellers are able to receive a favorable market price for their property in a short time frame. Below is an overview of the auction process for both buyers and sellers.
To download a PDF of Frequently Asked Questions, click here.
When your objective is to sell real estate within a specified timeframe, an auction can achieve market value in an accelerated time frame. In addition, auctions hold a large advantage over traditional methods by selling the property on your own terms.
Seller has control over the terms of the sale
Seller’s property is the focus of an individually tailored marketing plan
The sale date and closing date are predetermined
The seller avoids payment of current years taxes, and closing costs of the sale
Introduction
An auction provides several significant advantages to the seller over traditional methods of marketing and selling property. First, the seller retains control over the terms of the sale and can achieve market value within a fairly short period of time. Smart sellers understand that “time is money,” and by reducing the time to sale, the seller reduces any carrying costs he may incur holding the property.
Second, an individualized and well-conducted marketing plan makes the property the focus of a campaign that increases the number of buyers, encourages competition between bidders, and ultimately yields a better price for the property. Instead of bargaining the price down, the price is bargained up.
Finally, the buyer pays most of the costs associated with the sale. Typical costs that the buyer pays include, but are not limited to the closing costs, title insurance, and current year’s taxes (there is no pro-ration of taxes).
Setting up the Auction
After the initial contact by the seller, a representative of Hartman Auction Group previews the property to be sold and discusses the potential for realizing the seller’s objectives. If the seller decides to hold an auction, the auction is usually scheduled within forty-five days.
Hartman Auction Group prepares a comprehensive, individualized marketing plan for each property it sells. This marketing plan is executed in the weeks leading up to the sale date. A typical marketing plan includes but is not limited to print advertisements, direct mail, web site listings, physical property signs for real estate, and communication with brokers and buyers.
Since all property in an auction is sold “as-is,” it is available for potential buyers to preview and inspect prior to the day of the sale. For a real estate auction, Hartman Auction Group provides several opportunities for potential buyers to preview and inspect the property prior to the day of the sale at the convenience of the seller.
On Auction Day
Upon declaring the winning bidder, a cash contract with no contingencies is signed, which means closing is not contingent upon further inspection or financing. Buyer should obtain funding and inspection prior to the auction day. The sale is expected to close within a short time, typically 30-60 days, and the buyer must provide all funds on the day of closing or forfeit his entire deposit.
The more informed you are as a buyer, the greater likelihood you will be successful during the auction process. Feel free to contact Hartman Auction Group ahead of time to view the real estate properties you are interested in.
Buyer can name his or her own price
Buyer knows the exact terms of the sale
Long negotiations are eliminated
The sale and closing dates are pre-determined
Introduction
The more knowledgeable and informed you are as a buyer, the more likely you are to be successful as a bidder. All real property and personal property is sold “as is” at the auction. As a buyer it is your responsibility to preview the property carefully prior to the auction sale. In general, all property is available to preview just before the auction on the day of the sale. For real estate auctions, specified preview dates are provided in advance of the auction. To obtain the preview dates, review the online brochure for the preview dates or call Hartman Auction Group at (772) 872-6045. For any questions regarding the auction process, download the FAQ document.
Prior to the Auction
Most materials pertaining to a Hartman Auction Group auction are available to read or download online. They can also be requested from Hartman Auction Group by calling (772) 872-6045. Obtain and carefully read any informational materials about an auction prior to the day of the sale to familiarize yourself with the details of the auction, paying particular attention to any special instructions about registering for the auction.
On Auction Day
While anyone is welcome to attend an auction, registration and acquisition of a bidder’s card is required to be able to particicpate in the bidding. Prospective bidders need to have a photo id to register. A prospective bidder should plan to arrive early if he or she wishes to preview the property and has not had an opportunity to preview it prior to the sale day.
Real Estate Auctions
To participate in the bidding at a real estate auction, a buyer must present a cashier’s check. The specific amount required can generally be obtained from the auction brochure or obtained by calling Hartman Auction Group at (772) 872-6045. Please be sure to determine the exact amount prior to the auction, since Hartman Auction Group will not accept a personal check or allow you to bid without the required cashier’s check.
A buyer’s premium of 10% is added to the top bid price on the day of the sale in order to determine the total contract price. For example, if the successful bid was $100,000, the winning bidder will pay $110,000.
The successful bidder is required to provide a non-refundable deposit equal to 10% of the total contract price at the time of the sale. The successful bidder’s initial cashier’s check will be included as part of the required deposit, and a personal check may be remitted for any remaining funds. The deposit will go towards the final sales price of the property.
Unlike most real estate contracts, the contract for the auction sale contains no contingencies, and closing generally occurs within 30 days. The winning buyer must secure funding prior to the closing date. Without full payment on the day of closing, the purchaser will forfeit his entire deposit. In addition, the winning bidder is typically responsible for the current year’s property taxes and the closing costs of the sale.
Online Bidding and Bidding by Phone
Some auctions may have online bidding available through Hartman Auction Group’s web site. Please call Hartman Auction Group at (772) 872-6045 for details.
Information source: Florida Auctioneers Association (FAA).
