The Outer Banks frequently has auctions of real estate. These auctions are held by local, regional and national auction companies. Occasionally a great value can be purchased at an auction but just as often buyers make mistakes when purchasing property at an Outer Banks auction. Here are a few OBX Auction FAQs that will be good to know when beginning the purchase process.
Where do I find information on OBX Auctions?
What do I do if I have a buyer’s agent already?
What is a buyer’s premium?
What is the “reserve”?
What do I do if I don’t have a buyer’s agent yet?
How do I prepare for auction day?
Most auction companies list their inventory in the MLS prior to the auction. They realize that this provides their properties with immediate and significant exposure. Some of the auction companies have joined our association and others will affiliate with a local real estate company to make sure they get this exposure. Usually an auction company will advertise their auction in the local newspapers at least a couple weeks beforehand as well. Watching the local papers will also help you find auctions. Lastly there are a few companies like auction.com that hold local auctions. They will post all their auctions for the area weeks in advance. Your Scott Team Realty agent can provide you with these company’s web site addresses.Back to top
Almost every auction company will pay your Realtor out of their buyer’s premium fee so allowing your agent to help you in this process will not cost you any additional money. Furthermore, the auction company will not be looking out for your interests. Their job is to help their client get as much money for the property as possible. Your buyer’s agent will help you avoid the pitfalls of buying real estate unrepresented as well as help you determine fair market value for the property prior to the auction. Back to top
The buyer’s premium is a fee that is added on top of the final bid price. This is the fee the auction company earns for selling the property. It is common for this fee to be eight to ten percent of the final bid price. If you are bidding on a property you need to keep in mind there is this additional fee as part of your closing costs.Back to top
The reserve is the minimum amount of money a seller will accept for their property. If the highest bid is not more than this minimum then the seller keeps the property. Not all sellers have reserves. When there is no reserve it is called an absolute auction.Back to top
The auction company typically will not help you find representation. They will be collecting the same buyer’s premium from you regardless of your representation. When an agent represents you they receive less money so they have no incentive to help you find an agent. In fact they may tell you that you do not need an agent. If you do not have an agent yet contact Scott Team Realty and they will be glad to help you.Back to top
It is best to start your due diligence well ahead of auction day. Often times there are repair issues with a property that must be discovered. You also may want to check zoning regulations to make sure you can use the property the way you want to. Also, each auction company has their own auction process. It is necessary to read the information package of how the auction will proceed prior to auction day. To bid on a property most auction companies want you to provide them with a certified check for thousands of dollars or a credit card. If you are an unsuccessful bidder they’ll return the check to you or not charge your credit card. Keep in mind that once you are the high bidder most times you must follow through with the sale or loose those initial funds from that certified check or credit card.Back to top