Frequently Asked Questions
How Do I Sell at a Real Estate Auction?
Q. Why should I sell my property using the Auction Method?
A. To accelerate the sale of your property by generating additional consumer interest and activity. Advertising a property for Auction creates a sense of urgency, bringing all interested parties together on one specified day.
An Auction provides multiple bidders competing to buy, bringing higher revenues than negotiating with a single buyer. Non-contingent contracts and 30-day settlements are required of the buyer of your property. This means a quick transaction for you.
Q. Can I attend an Auction before agreeing to sell my home through the Auction Method?
A. Certainly! In fact, we encourage your attendance so you can experience a live example of the Auction process first-hand. Check our Upcoming Auctions schedule or contact us.
Remember, each and every Auction is different, so you cannot necessarily assume that your Auction will be like any other Auction you may have attended.
Q. I am not in financial trouble, and I am concerned about what people may think if I should Auction my property. Can you give me any insight on this?
A. You are not alone in your concerns. Many people are afraid of the old, outdated perception of Auctions that some people have. There are great differences in the marketing and the public image of a voluntary, 'by choice' Auction, such as ours versus a distress Auction. For example, some owners may offer financing on certain Auction properties. Our Auctions are positive, enthusiastic events designed to generate competitive bidding to secure the highest possible market price for your property.
Q. I am concerned about the net amount I will realize from the Auction, and my ability to cover my existing mortgage. What advice do you have to offer on this?
A. We understand your concerns and your need to cover an existing mortgage on your property. Auctions are designed to accelerate the sale of property by determining what the market is willing to bear. On Auction day, the market will determine what valuation is acceptable for your property.
The fact that you are selling at Auction does not change the market value of your property. In short, if the market value is at a level below your existing mortgage, then that is the price that you have to work with regardless of whether you use the traditional method or the Auction method to sell your property.
Q. Will we still have to consider contingent contracts?
A. Everything that we sell at Auction is sold "as is" and "non-contingent," with a 30-day projected settlement date and the buyer paying all allowable closing costs associated with the sale.
Q. Where will the Auction of my home be held?
A. We hold most Auctions on-site. By being on-site, bidders are constantly reminded of the positives associated with that particular property, which in turn, can encourage a higher bid.
Q. Who pays the Auctioneer fee?
A. The Auctioneer is paid via the buyer's premium, which is added to the buyer’s final bid. There is no commission charged to the seller. The seller is only required to invest in the advertising and expenses of their Auction event. This way you can be sure you receive the maximum advertising exposure possible for your property. If all the advertising investment is not fully used, whatever is remaining will be refunded back to you at closing.
Q. Does "as is" mean that I do not need to disclose any known defects?
A. Though we are selling "as is," we must abide by applicable State and Federal Laws. The Broker-Auctioneer will offer full disclosure to all interested parties in accordance with the law.
Q. How do I sign up for Auction?
Contact Pacific Auction Exchange to set up an appointment to view your property and determine whether it is appropriate for the Auction Method of sale. If your property is listed with a Real Estate Broker, ask them to refer your listing to Pacific Auction Exchange and the Broker will be compensated. After signing with us, expect a three to four week advertising campaign prior to your Auction day. Then expect to close in 30 days or less, with no contingencies.
Q. The property is priced below the market right now. What is this going to mean if I register it for Auction?
A. We find that often price is not the issue in determining why a property has not sold. Many times the reason that a property has not sold is that there has not been adequate traffic to view the property, and therefore, not enough interest has been generated in order to sell the property. In other words, it has become "stale" on the market. The Auction process is the best way to revive interest in the property and instill the excitement for it that will result in a positive sale.
Q. What types of properties do you sell?
A. We Auction all types of Real Estate, from condominiums, co-ops, townhouses, single-family dwellings, land, vacation properties, commercial, investment properties, to high-end premier properties and country estates. Auctions have been successful in all of these categories.
How Do I Buy at a Real Estate Auction?
Q: I've never purchased a property at an Auction. Where do I start?
A: Study the information available about the property in advance. The terms of a Real Estate Auction can vary, depending on the type of Auction the seller has chosen. Visit the property at an Open House and ask questions. Get any necessary financing arrangements made ahead of time.
Q: Since I'm not familiar with Real Estate Auction how can I be assured that all Department of Real Estate Rules and Regulations apply?
A: Brokers/Auctioneers must abide by all applicable State and Federal Real Estate Laws.
Q: Can I have any inspections done on the property before deciding whether or not to bid?
A: Absolutely! All properties are sold as is. You should do your inspections and ask questions prior to the sale. On the sale day, the property is sold with no contingencies. The Department of Real Estate disclosures are provided on the property prior to the sale: Transfer Disclosure Statement, Real Estate Agency Relationship Disclosure, Water Heater Compliance, Smoke Detector Compliance, Environmental Hazard Disclosure, Database Disclosure, Pest Inspection Report, plus a Preliminary Title Report. You may make arrangements with us for any other inspections you would like, as long as they are completed prior to the sale.
Q: How do I determine how much I should bid?
A: The Auction is the oldest established method of determining the value of property. The property is worth what qualified buyers are willing to pay! At an Auction, you immediately know what other qualified buyers are willing to pay, so you'll know that the price is a fair market value.
Q: What if I need time to get financing?
A: Your financing should be arranged prior to bidding on a property. This determines how much you personally can pay for the property, and establishes your comfort zone in the bidding process.
Q: What is the Buyers Premium?
A: The Buyers Premium is an Auction fee, added to the winning bid. It should be taken into consideration when you are bidding.
Q: How much do I put down as a deposit?
A: A 10% deposit is required on the day of the sale. The terms of the deposit will be in all advertising and brochures on the property. This deposit is non-refundable. The balance is generally due in 30 days or less.
Q: How do I register to bid?
A: You can pre-register with our office, or register at the Auction site on the day of the sale. You will be asked to provide identification and certified funds per the terms and conditions of the Auction. Verify the terms with our office prior to attending the sale.
Q: What if I'm already working with a Real Estate Agent and want to bid on property being sold at Auction?
A: You can certainly include your agent in the Auction process! We will compensate them at the close of escrow if you are the successful bidder. Your agent must pre-register you as a bidder with our office prior to the day of the Auction, and must attend the sale with you to represent you.
Q: I've never bid at an Auction before, and I'm concerned that I might not understand what the amount of the bid is?
A: Remember that the Auctioneers and their staff want you to completely understand the process. Prior to the start of the Auction, the Auctioneer will make announcements, and give all attendees the opportunity to ask questions. Once the Auction begins, a bid assistant may help in relaying bids to the Auctioneer. If at any time you don't understand where your bid is, or another person's bid, always ask! Don't make the mistake of trying to hold back if you want the property. Otherwise, you might end up missing your opportunity!
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