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How to be Prepared to Bid at an Auction

6 Steps on how to be prepared to bid at an auction.

People who have never bid before at an auction may be intimidated to place their first bid at a real estate auction. But no worries, we have 6 excellent steps to help you bid with confidence to obtain that new property for a future home, hunting ground, or investment. Here are a few things to consider when bidding.
1. Fees
Know what fees are involved beyond the final bid. Almost all auctions have costs beyond the final bid. Some are the standard closing costs associated with buying Illinois real estate, sometimes (not always) there is a buyer’s premium tacked on to the final bid to get the final purchase price, sometimes there will be a survey fee that will be collected at the closing of the sale.
2. Earnest money
Have an understanding of how much you will need to have as a deposit the day of the sale. Please know that this earnest money could be a non-refundable deposit so it is important to do due diligence. We never want to see your hard-earned money lost.
3. Understand the terms
Reading the terms and conditions is very important – if they raise concerns or questions for you it is a good idea to reach out to the auctioneer. This is often where you will find out about possession, fees, and any closing deadlines. As we mentioned in Earnest Money, you want to be clear because your deposit may be non-refundable. Be sure you completely understand the specific terms and conditions spelled out in the writing on your contract.
4. Financing
Have your financing in order! Know what you can spend the day of the auction. IF you are a cash buyer you most likely know cash is easiest. But if you are getting a loan, make sure you and your lender have had a conversation before the auction about how much you can spend. It is also important to know you can get the money on time. Simply verify that the down payment required by your lender is in the bank and you are ready to go.
5.Inspect the property
Inspections are the responsibility of the purchaser, that’s you! You do not want to be the winning bid and then find out the property is not what you thought it would be. We can’t say it enough research, research, research.
6. Inspect the title work
It is a good idea to see if the auctioneer has a preliminary title report prior to the sale for you to inspect. What is a preliminary title report? Well, it’s an offer to issue a policy of title insurance covering a particular estate or interest in land subject to stated exceptions. IF something on that report raises concerns it is good to consult the title company or an attorney to decide what the next steps are.
Armed with this information, you can be better prepared to bid with confidence at the auction. Think of this as a small checklist into a lifetime investment. Remember, Property Peddler Inc is always available to help our clients and future clients with all the in’s and out’s of land auctions and real estate. We go beyond the call.
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