10 Things Buyers Should Know About Auctions
- There is often a fee charged directly to the buyer at the time the offer is submitted. (For example Homesearch.com charges $2,500 to the buyer at the time the bid is submitted. That charge is reversed if they are not the winning bid.)
- Many auction sites require the buyers to do inspections PRIOR to submitting their bid.
- Most auction sites require the buyers to have a survey PRIOR to submitting their bid. If you do not get a survey, you will not have survey coverage on your title policy. (In other words, you do not know where the boundaries of the property are located).
- Title Insurance is not automatically included with your sale. You MUST ask for, and pay for it, separately! THIS IS ESSENTIAL TO PROTECT YOU FORM ADDITIONAL LIENS, ETC.
- Most auction sites such as Homesearch.com and Auctions.com DO NOT allow for any contingencies. No financing, inspection, survey or title search contingency. If you are the highest bidder, and there are any issues with the title, survey or physical condition of the property, you are still expected to close on the property.
- There are deadlines for when bids have to be placed, and or when final highest and best bids are due. The number of bids on a home can increase dramatically during the last few minutes of an auction period.
- There are sometimes deadlines for registering as an interested party to have the right to bid on a property.
- Title can be an issue with properties purchased at auctions. Buyers may receive a Quit Claim Deed or Special Warranty Deed. Find out how title will be transferred, and what type of title you receive prior to bidding.
- The house may not be vacant at the time the buyer purchases it at auction. Whether the house is vacant or occupied can control the type of deed that is offered. If the home is occupied, the buyer will be responsible for getting the occupant evicted.
- Purchasing a home at an auction may mean you have to pay your Buyer’s Agent yourself. Not all auction sites offer a commission to buyer’s agents.