Frequently Asked Questions

 

What is a real estate auction?

A Real Estate Auction is a method of buying and selling real estate. It is an intense and accelerated real estate marketing process that involves the public sale of property through open, competitive bidding.
 

What are the general differences between a public auction and a foreclosure?

Generally, a public auction is for sale by owner. The owner is not in financial distress, but has merely concluded that selling his/her property via the auction process is the most effective method. As selling at auction moves towards further towards the main stream, more and more people are finding that selling their real estate at auction to be the best way to maximize value in a very timely manner.

A foreclosure, on the other hand, is a forced sale by creditors. These auctions are sight-unseen and are generally held on the courthouse steps of whatever county the property is located. There are many more differences that are examined later in the FAQ section.
 

What do I need to bring to the auction in order to bid?

All that is required for a potential buyer to bid at all of our public auctions and foreclosures is cash or certified funds in the amount of the pre-determined deposit. Personal checks and letters of credit are NOT acceptable.
 

Are auction sales contingent on inspection?

All of our sales are on an "as-is" basis. There are no warranties as to the condition and/or the fitness of the property for a particular use. We encourage our buyers to do their due diligence prior to sale day for their own protection.
 

If I win the auction, what happens to my deposit money?

The deposit will count as a credit towards the purchase price of the property and placed in escrow. Please note; it is the purchaser's responsibility to obtain financing. If you plan to use a mortgage to purchase the property, we recommend that you apply for the loan immediately.
 

What happens if for some reason the buyer cannot settle on the property?

A well-conducted real estate auction by its very nature minimizes such failures. Failure to close can happen, but it isn't frequent. If the rare failure to close occurs, the auction seller can turn to the next highest bidders, who demonstrated their willingness to pay nearly as much as the buyer who failed to close.

If the buyer fails to settle on the property, he/she will be considered in default of the sales contract. In this instance, the buyer might lose all or part of their deposit and potentially be responsible for the cost of reselling the property.
 

When can I inspect the property?

For our public auctions the property is generally only available for viewing 30-90 minutes prior to the auction.

Foreclosures are sight unseen. The property is not open to inspection prior to the sale. You can view the property from the street, but remember that deed-holder still legally owns the property.
 

What happens if for some reason the seller cannot settle on the property?

Our service contract states that the seller must be able to deliver free and clear title to the property without any liens or judgments. Express Real Estate Auctions does not do an independent title search. In the case that free and clear title cannot be delivered by the seller, the buyer will be refunded his/her deposit.

Foreclosure sales the same rule applies, if the seller cannot deliver free and clear title, the deposit is refunded and the sale is considered cancelled.
 

Who is responsible for closing costs?

For both foreclosures and public auctions, the buyer is responsible for all closing costs, as stipulated in our contracts. Closing costs can include, but are not limited to title fee and recording costs.
 

What is an absolute auction?

An absolute auction is a public auction without a reserve or minimum. This means that the property, once the auction begins, will be sold that day. Foreclosures cannot be absolute.
 

What is the Buyer's Premium?

The buyer's premium is a service charge that is added to the high bid for our public auctions. Express charges 10% additional to the winning bid. In this regard, buyers pay our fee not the sellers.

Foreclosures do NOT have a buyer's premium.
 

What are the advantages to a seller in an auction situation?

There are 5 main advantages to a seller by having Express sell your property for you at auction:
  • Sell your property "as-is" for cash
  • Pay no commission or settlement cost
  • No fix-up costs or feasibility studies
  • No financing contingencies
  • Settle for case in 30-45 days
Buyers come prepared to buy. "Lookers" are eliminated because most often bidders must qualify through a deposit of a certified or cashier's check. Auction brings interested buyers to a point of decision. Buyers feel that if all the properties are sold before the auction ends it represents their last chance to purchase a desired property. Sellers get maximum exposure for their properties. The auction marketing strategy differs from conventional advertising. It is more concentrated, therefore more intense and visible. High carrying costs are avoided. Through auctions, the seller is in control and knows that if properly priced, his property will sell on a certain date, which is usually within 30-60 days of signing the service contract. By selling quickly, the seller is able to avoid high carrying costs such as insurance, real estate taxes, security and maintenance and is also able to benefit from the use of the monies to reinvest in other real estate or investment opportunities elsewhere.

Other benefits are:
  • Offers the seller another option.
  • Creates competition among buyers - auction price can exceed the price of a negotiated sale. An auction generates excitement and heightens buyer interest.
  • Accelerates sales - the property can sometimes be sold within six weeks of listing.
  • Auction is a true market forum - the highest buyer pays the lowest price a seller will accept.
  • A seller knows exactly when the property will sell.
  • A seller sets the terms and conditions of the sale, maintains control of the property throughout the auction (depending on auction type), and actively participates in the sale process.
  • Auction reduces the time the property is on the market.
  • Auction eliminates numerous and unscheduled showings.
  • Auction takes the seller out of the negotiation process.
  • Auction is an aggressive marketing program that increases potential interest in and awareness of a property.
  • Seller is able to obtain liquidity.
 

How can I be sure that I am getting a fair price?

The only genuine measure of value of real estate is what someone else is willing to pay for it. An appraisal is merely an informed opinion. It is not an offer to buy. The real measure of value of real estate, at any given time, is what it will bring under competitive bidding from informed and motivated buyers. Back to top
 

I have property to sell, what expenses am I responsible for?

Adverting is the only cost to our sellers. When a seller signs our service contract there is a pre-determined advertising fee. The amount of the fee depends on the size of the property and the size of the necessary advertising campaign.

If you are interested in selling property, please click here and fill out our brief questionnaire and one of our marketing specialists will get back to you.
 

What are the benefits of selling your property at auction?

The real estate auction is definitely a win-win proposition for everyone involved. The seller disposes of properties quickly and efficiently, thereby saving long-term carrying costs such as interest, real estate taxes and maintenance. For the buyer this can mean a smart investment, since properties are usually purchased at fair market value through competitive bidding. Because the auction sale is conducted in an open forum, both motivated buyers and motivated sellers have the assurance of watching the property's true market value emerge as the bidding process progresses. For both buyer and seller, fair market values for the property prevail. An auction creates competition among buyers and exposes the property to a large number of pre-qualified prospects. Because it is an accelerated sale, property can often be sold within 6 weeks of listing. For the agent, auctions can mean an increased client and customer base as well as increased profits.
 

What factors determine the success of an auction?

  1. The desirability of the property being sold. This includes location, condition and surrounding properties.
  2. An aggressive marketing and advertising plan geared to prospective purchasers.
  3. Realistic expectations on the part of the seller.
  4. Selecting the type of auction that best suits the property and the seller's needs.
  5. Conducting the auction in a professional manner and following up through closing.
  6. Undertaking due diligence ahead of time so buyers are knowledgeable and the only issue that remains is price.
 

Are all properties suitable for auction?

Most properties, but certainly not all, are saleable by auction. Residential property (including town homes, condominiums, cooperative apartments and single-family homes), commercial property, vacant land - even boat slips - are sold at auction. Some sellers try to sell unsuitable or unmarketable property through an auction. This is property that perhaps has been on the market too long, causing prospective buyers to consider it "tainted." Perhaps the project itself was poorly constructed or planned. These types of properties don't do well at an auction and most reputable auction marketing companies would not accept them.

One method used by auction firms to analyze the market, property and seller situations is the two-thirds rule. A general explanation of the rule is that if two out of three parts (market, property, seller) lean favorably toward auction, then auction should be offered to a seller as a sales option.
 

If a property doesn't sell auction day is it still possible to market it?

Yes. The auction marketing method has exposed the property to a large segment of the buying public. Many times a buyer who wants the property but is uncomfortable with the auction process will make an offer after the auction date. In other instances offers to buy the property prior to the auction date are made and accepted.
 

Don't real estate auctions depress home values?

Not at all. Real estate auctions reveal the true market value of a property because auctions are conducted in an open forum where all bids are known, and participants are given immediate feedback on the property's value. At auction, values settle at the level the market can bear, neither elevated nor deflated.
 

Who usually buys at real estate auctions?

Anyone can benefit from buying at a real estate auction. Many people who buy are first-time homebuyers who may otherwise be shut our of the real estate market. For them, the auction is a realization of a dream. Empty nesters and investors also comprise a large segment of the auction buying public.
 

How are properties usually advertised for auction?

This varies greatly depending on the type and value of the property being sold. One of the essential underpinnings for a successful auction is a highly aggressive marketing program. Each auction has its own powerful promotion and advertising. Auction marketing is an intensive effort and a well-timed plan to create massive interest in the properties available for sale. The advertising budget is established according to specific properties and the type of market that's needed to be reached. That budget is then broken down into various forms of advertising that will best target the market for the auction. The various forms of advertising are: sale bills or brochures mailed directly to prospective purchasers and posted in public places, newspaper advertising in local and possibly regional or national papers, ads in trade journals and magazines, internet, radio ads, signs posted on the property and possibly television and cable ads, and phone solicitation. Express is an experienced auction company knows which forms of advertising are best for a particular type of auction and its location and will facilitate everything from preparing the advertisements to placing them in the desired forms. The aggressive advertising hits large groups of buyers that will come and competitively bid on property thereby yielding true fair market value for a seller's holdings.
 

What are the advantages to a buyer in an auction situation?

The buyer knows the seller is fully committed to sell. Auction agreements obligate the seller to transfer title to the highest bidder in an absolute auction; the auction agreement obligates the seller to transfer title to the highest bidder that meets or exceeds the reserve price in a non-absolute offering. The buyer knows he is getting the property at a fair market price. The buyer feels comfortable with the purchase knowing that there is a contending bid just one increment under the purchase price. The buyer has negotiating power. The buyer can withdraw from the bidding at any time until the gavel falls. The buyer sees many offerings in the same place at the same time. He is able to make market comparisons quickly and easily.

Other benefits are:
  • Buyers set their own purchase price.
  • Auctions eliminate sometimes long negotiation periods.
  • Auctions reduce time to purchase property.
  • Buyers do not have to worry about contingencies because purchasing and closing dates are known.
  • Buyers know property owners sell at lowest price possible.
  • Buyers can receive favorable financing.
 

How long do I have to close on the property?

The time frame varies depending upon the type of property auctioned. Generally, our contracts stipulate a 30 day settlement from auction day to closing. Please see the specific terms for each auction to determine the length of time to close.
 

Why should real estate agents look favorably on auctions?

Increasingly, real estate agents are discovering the benefits of real estate auctions. They are realizing that auctions promote activity in an industry that thrives on activity. Agents can get involved in auctions themselves. If an agent brings a buyer to an auction, and that buyer purchases property, the agent can receive a commission. To ascertain the amount and structure of any commissions to be offered, refer to the particular terms and conditions of the auction contract. A single auction for one development might bring in dozens or even hundreds of prospective buyers who are now in the real estate agent's market area.

Other reasons:
  • Provides a list of ready and qualified buyers.
  • Offers clients and customers new selling and purchasing options.
  • Increases market share and revenue - new business opportunities are added.
  • Enhances company's image.
  • Develops your own market niche - able to offer new products and services other agents aren't providing.
  • Exposes the property to many potential purchasers.
  • Auctions appeal to people - it brings them in to look at all the listings you hold, not just the auction listing.
  • Auctions cause referral and return business.
  • Builds rapport with auction firms.
  • Agents don't have to be auctioneers to earn commissions -
  • Earn referral fees as referring agent/broker
  • Work as cooperating agent/broker
  • Work as listing agent/broker.
  • Please click here to go to our "ways that realtors can get involved in real estate auctions"
 

Does Express Real Estate Auction Services pay broker fees?

For our public auctions we will pay brokers. We pay brokers for referrals, if they are the listing agent, as well as brokers who represent a buyer at an auction. The amount depends on the particular situation. For instance, a listing agent will receive different compensation than a broker who represents a buyer on auction day.

Please note, you must register as a buyer's broker at least 24 hours in advance. There is a form to do so and it must be completed and sent to our office. Verbal agreements are not acceptable.

We do NOT pay broker referral fees for our foreclosures. 
 

What should I look for when attending an auction?

When attending a real estate auction, look for:
  • The availability of a sales contract on-site for bidders to review.
  • The ease of the registration process.
  • Enthusiastic and knowledgeable staff to stimulate maximum bidding potential.
  • The availability of financial or pre-qualification services to bidders by the auction company.
  • A clean environment and a pleasant décor.
  • The use of quality photos, slides or videotape of the property during an auction.
 

Are tax sales and foreclosure sales the same?

No, once a foreclosure sale is done, the previous owner has not right of redemption on the property. At a tax sale there is generally a 6 month right of redemption whereas the owner has the right to make good on the taxes due and thus keep his/her home.
 

What happens if the property I purchase at a foreclosure sale is occupied?

It is the purchaser's responsibility to obtain possession of the property. You will need to file a "Writ of Possession" with the Circuit Court. For specifics and the legalities involved, you should contact a real estate attorney.