At Concierge Auctions, we know luxury real estate. Our principals have touched every aspect of the business. In fact, we were born out of the brokerage community. As a result, our combined efforts have produced over $1B in sales — spanning 32 U.S. states and 14 countries — and our global Rolodex includes over 370,000 contacts.
We maintain a pulse on the top luxury markets worldwide.
Our expertise has earned us the “Best Overall Marketing” award from Who’s Who in Luxury Real Estate, named one of America’s fastest-growing companies by Inc. Magazine for the past three consecutive years, and Inman News’ selection of our President, Laura Brady, as one of the 100 Most Influential Real Estate Leaders.
This seven-part blog series details how to develop a successful strategy for winning at a luxury real estate auction. In the past three weeks, we discussed how to narrow your search area, the importance of knowing the market, and considering auction. This week, we discuss terms and conditions of a sale at auction. We hope you find it useful.
7 STEPS TO WINNING AT AUCTIONPART FOUR OF SEVEN: AT AUCTION: TERMS & CONDITIONS OF SALE
Buying property at auction is unlike any other real estate transaction you’ve participated in; just as luxury properties are unique in their features, they are precise in their terms and conditions. Because an auction is unlike any way you’ve purchased property before, reading and understanding the terms and conditions of the sale is important.
But what will you typically find?
• A description of the auction format. There are typically three different auction formats.Absolute auction: The property is sold to the highest bidder, without regard to the bid amount.Reserve auction: There is a minimum price the property will sell for. If bidders do not reach the minimum reserve price, the property will not sell. Reserve auctions sell at or above the reserve price.Unpublished reserve auction: Similar to a reserve auction, except the reserve amount is not known to the public.
• Details on the rules of the auction. The rules may include and outline the following: Registering for the auction Methods of bidding and oral contracts Methods of payment delivery The type of auction A detailed description of the property Auction beginning and end times Any potential liability (such as a deposit, should a bid not go to contract)
It’s important to look here for details that will arise before and during the auction, such as:
• The sale is most likely a cash transaction, which means financing is not a contingency.
• Closing is about 30 days from the auction date.
• A cashier’s check or escrow deposit is required to get a bidder card.
• How to obtain a copy of the auction day purchase and sale contract, if it hasn’t been included in previous discussions.
• A description of the property itself. This might seem like a no-brainer, but it needs to be stated. Many properties that go to auction are sold “as-is,” meaning negotiating changes to the property has little to no chance of progressing into the terms of the sale. Property sold “as-is” can include the home’s furnishings and structures outside of the residential structure; the terms and conditions outline these in detail.
Next week, we discuss performing due diligence on the property.