Wednesday, January 19, 2011

Foreclosure Auctions?! Here's a realtors first time perspective and tips on how to bid in Pensacola, FL auctions!

Interested in Purchasing  Real Estate via Auction in Pensacola, FL?
Have you heard the buzz about Real Estate Auctions being the new trend in liquidating bank inventory? I sure have, and decided it was time to experience my first Real Estate Auction!
As an auction virgin, I’m writing this blog to show you my first experience and urge you to look into the auction venue of purchasing real estate. 
For my first auction, I went to 1513 COLWYN DR in Cantonment, FL 32533. This home was advertised with a sign in the yard and is conveniently located in my co-workers subdivision, or I would have never been aware of the auction. 
There were approximately 40 people at this particular auction which was held on 1/18/2011 at 10:30 at the property and hosted by Williams Auction.  The house was open for viewers to inspect and take a walk through, and bidding was done on the front lawn.  There were 2 auctioneers- one checking with any phone or online bidders and one taking bids on the lawn, although this was a simultaneous process.  There were actually 3 properties sold at this site and the entire process took less than 30 minutes. The auctioneer outlined closing costs, bidding instructions, title policies, etc. and then begun the auction. The first auction lasted less than 2 minutes and a house on Sharmon Dr. in Pensacola was sold for $55,000. Another beautiful home on Mulat Rd. in Milton sold for around $115,000 and the home on Colywn ended up going around $125,000.  There is a buyers premium in addition to these prices- typically a flat fee or a percentage amount which is to be paid on top of the auction price.  All three homes sold for excellent prices and I was exhilarated by the auction progress- how fast it was and how low the homes sold for. 
The lady who won the home on Colwyn Drive was standing next to me, and very excitedly screamed to her children (I assume) in the car “We got it, We got it!” Buying anything on sale feels great, doesn’t it women?  This link is to the county tax records on this home on Colwyn Drive so you can see what a steal this price was !  (Previously sold for $250,000 in 2006!

I must admit, my father sells antiques and I’ve spent a lot of time at grueling auctions that crawled with 1000’s of objects being sold. This auction was nothing like all those.
 I urge everyone to get out and check out some of the auctions being held in your area- including auto auctions!  I hope the resources I have attached are beneficial to you.  
How to find Auctions in Pensacola?
 Most auctions are advertised by signage, as well as in newspapers and of course on line.  I’ve been trying to find a database where auctions are listed, but I cant!
I do however, have knowledge of these companies holding auctions in the Pensacola, FL Area.
Hudson and Marshall-
Williams & Williams Auctions –
Realty Bid-
Some auction homes will be listed on the multiple listing services as well as other real estate websites, but some are only featured on the auctioneers’ websites. 
What are the terms of the auction?
All auctioneers have the terms spelled out way before bidding beings.  Check for them in writing.  Just for fun, the terms of the auction I attended were as follows:
1.       Terms: Bidding confirms you’ve inspected the properties (or waived your ability to inspect) and that you have read and agreed to the terms of sale in today’s Contract and Terms of Sale- Please DO NOT BID unless you have done this.
2.       Disclosures: The Property disclosures are located on the back of this sheet. Anything that Seller or Williams & Williams knows about the  properties has been disclosed in today’s materials. Properties are being sold as is without any further inspections or repairs. By bidding you agree to all disclosures.
3.       Down Payment: you must make a 5% down payment ($2,500 minimum- whichever is greater) immediately following the auction- personal checks and business checks, money orders, and cash are accepted. Credit cards are not accepted on the lawn.
4.       Contact: The contract is NOT assignable. The deed names provided by the high bidder can not be altered and must be present unless you have their power of attorney.
5.       Approval: Properties are sold subject to Seller confirmation unless designated as an absolute auction. (this one was not, as most auctions aren’t). Most approvals are received from seller within 14 days or less; upon approval you will be notified by our staff.
6.       Title: You will receive an owners title insurance policy as evidence of insurable title. Real estate taxes will be pro-rated through the date of closing.
7.       Closing: You must close on this transaction within 30 days from the acceptance date, unless a different period of time is indicated on your Contract and Sale Day Notes. Financing is the buyer’s obligation, and you should be pre-approved before bidding as there are no financing or inspection contingencies or other delays allowed. You will be responsible for closing costs.
8.       Possession: You are not allowed access or possession of the property until after closing.
9.       Buyers Premium or Auction Service Fee: Each property may be subject to a Buyers Premium of 5% ($2,500 minimum) added to the high bid or auction service fee of $3,000.  Please see the Sale Day notes and listen to the auctioneer for the specifics about each property.
10.   Bidding: The auctioneer controls the bidding and corrects any mistakes made. The bidding will only last a few minutes.
What types of homes are Auctioned?
I’ve seen one bedroom shacks, condos, single family homes, all the way up to luxury water front homes and mansions for sale at the auction block!  Auctions also include commercial and multi family properties in some cases as well.
Are the Auctions Absolute or not?
Absolute is defined as: An auction in which the subject property is sold to the highest bidder regardless of the amount of the winning bid. There is no Reserve Price.
Read more:
The reserve price represents the lowest amount the bank or seller will take in an auction scenario. Some auctions are sold absolute and some are just auctions, so make sure to pay attention to that!
Do I have to have Cash?
A lot of auctions will allow for financing that can be closed in 30 days. However, make sure you have more than a pre-qualification, but rather a pre-approval and make sure your lender understands the condition of the home. Without a home inspection contingency, you will need to check with your lender and make sure the property condition will not affect your ability to purchase the home through a lender. Also, you want to make sure the home will appraise for purchase price including the auctioneer’s premium.
Other resources for Auctions:

 Thanks and have a great day!

Nicole St. Aubin, Realtor
Realty Masters of FL
4400 Bayou Blvd. #58B, Pensacola, FL 32503
(850) 473 3983 Office
(850) 473 3975 fax/ (850) 324-1615 cell


1 comment:

  1. We got our house through a real estate auction company and it ended up being a great way to go. We got the house for a great price and we love it!


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