absolute auctions - Posted by Carrie

Posted by Carrie on August 22, 2003 at 23:22:37:

Thanks for the info. I will be careful and do my due diligence before I attend. I really do not expect to bid but I am going to put a max on the prop that is low enough for me to be comfortable with and if it is selling for ridiculously low I may have to get my next deal. :slight_smile: I am not the type to lose my head in the heat of the moment so the bidding war won’t get me. I went to another estate auction this summer and that prop got pushed WAY up cause the man’s son wanted it. (The father was annoyed at him because he never came around so auctioned all his stuff instead of leaving it to them… long story) Anyway thanks for the information!

absolute auctions - Posted by Carrie

Posted by Carrie on August 22, 2003 at 12:07:16:

There is an absolute auction coming up near me that I am going to go to. I was wondering if there is any chance I could get a good deal from this or do prices normally get driven way up? Or does it just depend on the prop? Also an Absolute Auction means that there will be no leins attached or anything right? It is just the property with a clean title. So I will not have to search for leins and such before hand because they will be erased? This prop is described as needing TLC, but I have not been by it yet, the open house is on Monday, I plan to go. I plan to go to the courthouse Monday morning and pull comps to get an idea of value.
Basically what I want to know is what prep work should I do before going to this auction, besides getting comps?
Thanks in Advance. :slight_smile:

sorry this kinda jumps around I am in a hurry :slight_smile:

absolute auctions & Pennsylvania - Posted by David Krulac

Posted by David Krulac on August 23, 2003 at 19:59:57:

absolute auctions usually attract many bidders, sometimes more bidders that non-absolute auctions.

some of the auctions are charging the transfer tax totally to the buyer, whereas most sales in our area the buyer and the seller split the transfer tax.

another thing is many auctions are charging “buyer premiums” which is basically a commission for the auctioneer. I’ve seen it as high as 5% charged to the buyer to pay for the auctioneer.

Good luck,

David Krulac
Central Pennsyvania

Re: absolute auctions-WATCH OUT! - Posted by Willie

Posted by Willie on August 22, 2003 at 18:00:50:

An auction is a good place to get burned if you do not know what you are doing. Like Ron Star, I recommend you stay away from bidding at any auctions until you thoroughly understand what it is all about. Absolute auction, were I have been, means there is no minimum bid set, thats all. Whether or not the title is clear is up to your due dilgence to verify, before the close. To my knowledge any auction will not erase any liens. This lack of the detail of the knowledge of the process is a good reason that you should not, under any circumstance, bid at all at your first auction. Be sure you not only pull comps, but look in detail at the properties. Above all, resist and do not get caught up in the bidding frenzy that you may see occur. The auctioneers and their helpers are experts at it. When you have been to several and then decide you know enough to bid, make sure you set yourself a maximum, based on your actual perusal of the property and due dillegence determined actual worth, and DO NOT GO OVER IT!

Re: absolute auctions - Posted by Sterling

Posted by Sterling on August 22, 2003 at 14:35:15:


I have had successes with 4/6 auctions that I have attended. These are defintely good opportunities to purchase properties at 30-40% off. My experience with these auctions are:

  1. The early stages of the auctions are key to setting the tone of the day. You will find out early on how much people are willing to pay as compared to the opening bid.

  2. Their will be some people there looking for properties to live in. These people will focus on properties in the better neighborhoods and will pay close to if not above market value.

  3. The good deals are in cosmetically challenged properties in marginal areas. .

Again, I would do my do diligence and attend the open houses and try to gauge the cost for improving the property and set a maximum amount you will want to pay for the property.

I know this is common sense but do not get caught up in the heat of the bidding and bid way above your ceiling price.

Lastly, the better auction houses will convey the property the free and clear of incumberances.

btw, where is the auction being held ?

Good luck,

Re: absolute auctions-WATCH OUT! - Posted by John V, FL

Posted by John V, FL on August 23, 2003 at 14:29:33:

Usually the properties do come with title insurance, ree and clear title and prorations of taxes and close like any other real estate transaction. Only time I’ve ever heard of not conveying clear and marketable title is when the counties get ownership of the tax sale junk that nobody wanted either at the government auction or from lands available for taxes and then hire an auctioneer to get rid of them.