How Do House Auctions Work?
HOW HOUSE AUCTION WORKS.
House auctions deal with the buying and selling of homes through auction. Due to various benefits offered by auctions, it has been regarded as one of the best ways to sell as well as acquire homes. It works in a very simple way and without stress. They include:
• Engagement rules: The agent is required to provide the property’s documentation at least 30 minutes to the commencement of the auction. The first course of action is for the auctioneer to make a detailed announcement of the information. However, auction laws vary from state to state, so you may want to discuss the legal criteria with your agent.
• Opening bids would be set after a request by the auctioneer and other bids must rise from this amount such as in $10,000 increments. Although, a different amount like $5000 can be bid but it depends on the auctioneer to decide whether to accept or otherwise.
• Immediately the target price has been attained, the house would be considered to be on the market. Therefore, the house would be sold to the highest bidder. However, if the target price is not attained, the auctioneer will be forced to ask the property owner if he so desires to sell at a price lower than that of the market value. When the final bid has been made and the property owner is comfortable with it, the auctioneer will call the word ‘going’ three times and if any other bid is not made, the house would be sold to the final bidder.
• The sale is followed by an immediate down payment which is usually 10% of the total purchase price. And the settlement which is to be set by the seller is usually within the range of 1-3 months. But, it is however critical to put the buyer into consideration when setting the deadline for the down payment so as to increase the possibility of completion of the sale. The house sale is considered to be completed only when the contract has been signed by both party, all appropriate checks and transfers made and balance of the purchase price paid.