How Real Estate Auctions Work

Generally, the overall auction process requires 4 to 6 weeks from the signing of the agreement to the owners desired sale date.  More complex property types, however, require a longer timeline.  These parameters allow adequate time to properly and most effectively implement the marketing process to sell the property.  The overall auction method process is generally approached as follows:

5-6 weeks before the auction, the different types of auctions available to the prospective client are addressed.  An agreement is made with the auction company to auction property with desired terms and conditions for the auction being detailed by the seller.   A date and time is selected for the auction day.  One or two open houses or “Previews” are planned prior to the auction day.  A marketing program is outlined that is customized to the seller’s property and target audience. The advertising campaign is refined and submitted to media.
 
3-4 weeks before the auction, potential buyers, generated through a combination of marketing tools and open houses (previews), are provided with a Property Information Package (P.I.P) detailing: registration, earnest money contracts and deposits, property information and viewing, instructions for auction day, and terms and conditions.  The auction venue is confirmed and evaluated for setup/presentation.

At the auction, the potential bidders must have a cashier’s or certified check of usually a minimum of 5-10% of the estimated property value.  If the potential bidder does not have an earnest money check, they cannot participate in the auction.  The auction is conducted by experienced auctioneers who are trained to create a comfortable, exciting environment that encourages competitive bidding amongst potential buyers.  The purchase contract is signed by the winning bidder and escrow is opened.   Escrow closes in 30 days or less.  After the successful execution of the auction, the auction company will  aid to facilitate closing transactions by providing complete auction documentation, accounting, and support service to clients and buyers.  If the transaction fails to close, the buyer’s deposit is forfeited.  



The overall goal of the auction process listed above is to insure that the clients’ property is offered to the best willing and able buyers by creating a highly competitive auction environment.   In doing so, the clients' property will be in an excellent position to receive the highest price possible in 30-45 days without any contingencies.   All in all, the condensed selling timeline of the auction method is just one of many seller benefits advantageous to owners seeking a quick solution to their real estate selling needs.