(806) 244-4453 Fax

Can You Purchase Something Before It Goes To Auction?

Wednesday, August 4th, 2021
gavel priority auction

Auctioneers get excited when more than one person wants to bid on an item. They know the more people they can bring into the auction will be good for them and fun for all involved. But what if you see something you want to buy before an auction? For most auctioneers, the answer is no. This is because auction houses print catalogs, do advertising in newspapers, print flyers, and do a lot with online pictures for active bidding.  In addition, auction houses have a contact list they send out with all the items that are for sale.  Can you imagine if you were one of the people on the contact list and when you got to the auction, what you wanted to bid on was not there?  Not only would you be angry, but you might even start to question the auctioneer’s ethical behavior.

Consigner Considerations

Once a seller decides to sign a contract with the auction house for their items, it is legally binding.  If a friend of yours offers you big money before the auction and you decide to sell it to them, you might not be ready for the consequences.  Yes, you might lose money at the auction, however, if you break a contract, you might become untrustworthy and not be able to participate in future auctions.  In some cases, many will not work with that person again. 

Auctioneer Ethics

All good auctioneers have a reputation to uphold and will want to be fair to all potential buyers.  Good auctioneers will not sell an item that has already been advertised online.  If they do, buyers will not trust them in future auctions- thus losing business.  Always be sure to research the auction house you want to sell your item to. 

Learn The Auction Process for Homes

When going to an auction no matter what you want to buy, know the purchase methods.  In most cases, you will need 10% upfront and the balance will be due in 28 days.  In addition, consider auction fees or the buyer’s premium of 5-10%.  If you are looking to buy a home the buyer will also have to pay for escrow and closing costs.

Getting Your Paperwork in Order

First, make sure you are pre-qualified and committed to the loan amount you want to borrow.  Whether you want to buy a house or a log cabin, research the home’s title, back taxes, IRS liens, and much more.  All this can be easily researched in the city or county deed records. Also, beware of the competition.  Now would be the time to get an agent that can help you.  A lot of homes are in foreclosure.  The house you want to bid on could already be up for bid in a sealed bid or online.  One big advantage is that you are a would-be occupant who wants to pay more than an investor.  You do however take some risk wasting your time if the home you want is at a reserved auction.  In this case, the lender gets to establish a minimum reserve price to the bidders, and you could come in too low.  Therefore, it is a great idea to have an agent help you during the process to save money and get the home of your dreams.

Can I Make an Offer on a Property Before the Auction?

Unlike other auctions, many auction houses selling the property will welcome pre-auction offers.  If you’re interested in the property, try making an offer.  Understand that many sellers require them to be sold in the auction room.  Before making a pre-auction offer, consult with auction teams, offer a strong and top-end bid, and hope for the best.

Auction Process

Most auction processes take less than two months for the buyers and the sellers.  Research and know what you are bidding or selling on any items you are interested in. If you have an item you want to sell such as cars, farm equipment, houses, furniture, or more, call us at 806-224-6776 or check out our Upcoming Auctions.  We hold auctions with unique and interesting items.