There are three major differences in purchasing real estate at auction vs. purchasing real estate through traditional brokerage.
The first difference is the time that the buyer’s inspection of the property must occur.
In traditional brokerage, the buyer normally makes is due diligence inspections of the property after signing a purchase contract. However, in and auction, the buyer must inspect the property to his/her satisfaction prior to bidding on the property and signing a real estate purchase contract.
The other major difference is how the purchase price is determined. In traditional brokerage, the price is negotiated between the buyer and seller. However, in an auction, the price is determined by competitive bidding. The successful buyer will have to pay a little more than every other registered bidder. The most the high bidder can be wrong on his bid is the difference between the high bid and the second highest bid. Therefore, the buyer can always be assured that someone else was willing to pay just a little less than the highest bid made.
The third major difference is the terms of the purchase contract. In traditional brokerage all contract terms are negotiable. However, in an auction, the seller establishes the contract terms. Therefore, the buyer, needs to thoroughly understand the “terms and conditions” of the auction and the purchase contract he will sign if he is the highest bidder on the property.
Our agents act as “Buyer’s Agents” in traditional brokerage real estate transactions all the time. Even when we are conducting real estate auctions, our brokers can assist buyers as “Buyer’s Agents” to help them understand how do conduct “due diligence inspections” of the property. They can also help buyers with financing, if that is necessary to complete the purchase. They can also assist the buyers in asking question
Even Jake Forbes and Bill Forbes, who are usually “Seller’s Agents” of our real estate auctions strive to be sure that prospective buyers fully understand the “Terms and Conditions” and other documents necessary to complete the transaction.
If you are interested in purchasing real estate at auction, whether it’s our auction or another auction company’s, be sure to call us to help you with your needs. You will likely need advice from a person who is not only a licensed real estate broker but also a licensed auctioneer as well. Bill Forbes and Jake Forbes are the only two people in Northeastern North Carolina that possess both licenses to give you the best advice.