Many bidders often have erroneous assumptions regarding their deposits for real estate auctions. To be approved to bid, bidders must acknowledge the buyer's premium of 10% to be added to the high bid for the total consideration. At the conclusion of the bidding, the high bidder is expected to sign the sales agreement and make a deposit which is a flat amount. No funds are due to register, but we make clear the buyer's premium and the deposit requirements. The deposit is applicable to the purchase price, with the balance due in 45 days.
While there are multiple options for collection of the deposit, I prefer to state a flat deposit so the buyer can easily prepare for sale day. Generally for properties less than $100,000, the required deposit is $10,000. If the high bid is $100,000 or more, then the typical deposit is $20,000. Deposit amounts for each auction may vary, so make sure you read the terms or ASK!
On sale day at the conclusion of bidding, I will reach out to the high bidder and confirm the buyer name. I prepare the purchase agreement and send it for signature within an hour or so of the conclusion of the bidding. The buyer can either physically take a check to the closing agent, or wiring instructions will be provided and verbally confirmed via phone so winning bidder can wire funds.
Once the contract is signed and the deposit is wired, the buyer or buyer's closing agent will work with the seller's agent to transfer the title to the new buyer within the 45-day time period. The buyer's funds are held in escrow to be applied to the purchase price at closing.
While there are conditions where the buyer would forfeit the deposit, contracts are always available on our website for review prior to the day of the sale. Properties are available for inspection prior to sale day as well.
By the time sale day comes around, my goal is for bidders to have a clear understanding of the terms and to have a fair chance to win the property. This is the #DoubleAExperience. Honesty and transparency to achieve the best results for our sellers and uphold a standard of honesty to our customers.
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