REAL ESTATE AUCTIONS IN THE GULF SHORS AND ORANGE BEACH ALABAMA AREA - WHAT YOU NEED TO KNOW IF YOU EXPECT TO FIND AND ACTUALLY GET A BARGAIN AND NOT JUST SIT ON THE SIDELINES.
WHY THE SELLER USES THE AUCTION METHOD TO SELL REAL ESTATE.
• Depending on the various cycles experienced in all facets of the economy the method of using an auction becomes a popular means of “moving” property especially for an individual or group that holds ownership of a significant amount of properties saddled with a sizable on-going carrying expense in a downward trending real estate market.
• The auction method satisfies that Seller with a need to move a number of properties fast.
WHAT IS ABSOLUTE AUCTION VS. A STANDARD AUCTION?
• An “absolute” auction means the Seller has an obligation, once bidding commences, to sell the property being bid on at that time for the highest bid amount. The seller, may however, elect to remove properties or cancel the auction at any time other than when bidding is in progress. For example, several properties have been advertised to be sold by auction. The bidding begins and the first property is awarded to the highest bidder. AFTER that bid process was completed, the seller then elected to remove the remaining properties from the auction.
• In an auction not declared “Absolute” by the seller the Seller reserves the right to accept or reject the high bid and is under no obligation to sell at any price.
WHAT DO I HAVE TO DO TO PARTICIPATE?
• As a buyer you will need to request and complete a bid package from the auction firm for the auction in which you have a desire to participate in. Normally you will need to provide a specified amount as a down payment (sometimes this can be submitted to the Auction Group the day of the auction).
• Often you will need to pre-qualify for a loan in the amount of the price you will be willing to pay for the property.
• It is very important to read the auction brochure completely and understand what you have to do in order to be able to bid well ahead of the auction.
• It is also very important you receive all notices and disclosures and title information required for each bidder and that you understand what this paperwork says.
• Once you are properly registered you will receive a bid number on a paddle that you raise ONLY when you are bidding on a property.
WHAT CAN I EXPECT TO HAPPEN ONCE THE AUCTION STARTS
• Be ready for a lot of action with a very fast speaking person at a podium and several Auction employees pointing at people with whistles going off signifying that someone has just met the current bid. This is a fast and furious business intentionally creating confusion and excitement to get all bidders participating.
• EVERYTHING that happens in this process is done for a reason.
• If you, for example, raise your paddle accepting the current bid amount, someone from the auction company will point their finger and blow a whistle very loudly to signify you as the current bid holder. Is all that hype so necessary? Absolutely. You, for that moment, are in the SPOTLIGHT, and intentionally made to feel SPECIAL so you will more than likely RAISE YOUR PADDLE AGAIN later if necessary to gain the highest bid.
• This sounds like a lot of pressure and a person could get caught up in all the hype and make a decision they later regret and end up paying more for a property then intended. You BET you could and that is why the next section is so important.
DO THE RESEARCH-HAVE A PLAN AND STICK WITH IT NO MATTER WHAT
*I have been to many auctions where it turned out there were awesome buys yet MANY bidders opted not to participate and ended up sitting there almost frozen and unable to take advantage of the situation. How do I avoid BLOWING A GOOD DEAL?
• *It’s easy. Do your homework. Better yet have your realtor (me) do it for you. Determine ahead of time what property you want to bid on and how much it is worth to YOU.
• *I will do the research to determine what similar property to that your interested in is currently selling for so that you can decide how much it is you are prepared to bid.
• The auction company for referring you will pay me, so what I do for you does not cost you anything. In fact the effort I put in for you should save you money by giving you the numbers you need creating less confusion for you the day of the auction.
• Less confusion means fewer mistakes. You have to go in with a clear mind and your game plan intact because the auction process will attempt to get you caught up in the hype and create doubt.
• All these people are bidding more than what I came up with. Are my numbers wrong? Should I be bidding higher? The answer is no and no.
• The numbers you (or I) researched DO NOT LIE. Never let yourself get caught up in the hype going on around you.
OTHER SUGGESTIONS AND NOTES
• Get as much information on the property as possible. Is the property involved with an association? Are there dues? Are there any other liens on the property that I will be responsible for over and above what I bid? Are there any utility easements or other encroachments on the property I can’t see but will have to honor? I will get you all necessary title work and look for any potentially negative findings the disclosures identify.
• Go and physically see the property if at all possible or I will go and provide you pictures and video if not.
• Don’t worry about things like big crowds at the auction. One recent auction I attended must have attracted close to five hundred people, however, only about seventy had registered for a bid number on nearly fifty properties being auctioned that day.
• Almost all auction companies now have what is called a “Buyers Premium” which is a fancy phrase that basically means you will pay a percentage over the bid amount (usually 10%) that must be added to the total you will pay. So for example, if your winning bid total was $20,000 you add the “Buyers Premium” of $2,000 (10%) and end up paying $22,000 for the properties.
SUMMARY
*There can be some great buys found in auctions, however, like lotto, if you don’t participate you cannot win.
• I have links here available for you to view various upcoming auctions being held by several Auction Companies.
• If you contact me I can do the market analysis homework in that geographical area to give you the current value information you need and will assist you step by step so that you are comfortable with your plan on auction day.
• The goal here is to BUY LOW and the only way you can be assured the price you are willing to pay is low is to have the actual recent sales figures from the area the auction is being held.
• I do this work for you and it costs you NOTHING. I simply complete the referral forms provided by the Auction Company and will be paid by them if you ultimately purchase a property.
CONTACT ME |
