Buying at Auction
How to Buy at Auction
Preparing to Participate in a Hanna Commercial Auction Event
Auctions are a terrific platform for purchasing real estate as serious purchasers are connected with serious sellers in a fair and open bidding environment. Real estate auctions are exciting, easy to understand, and often lead to potential bargains that might not have been realized in a traditional negotiated offering. Below are a few helpful suggestions regarding proper procedure for participating in an upcoming Hanna Commercial real estate auction event.
Step One - Request an Auction Brochure
Once you find out about an upcoming Hanna Commercial auction we encourage you to visit our website or contact our office to acquire the Auction Brochure available to you by mail or PDF download. The Auction Brochure will include important information and photographs about the real estate being offered in addition to instructions regarding your opportunity to preview the property. The Auction Brochure will also include the Auction Terms of Sale. You will want to carefully review this information which will include (1) Registration Procedure, (2) Requirements of the High Bidder, (3) an explanation of how the property will be offered, (4) Financing Opportunities, (5) Auction Day Cashier Check (Earnest Money) Requirements, (6) Bidder Packet Order Form, (7) Buyers Premium, and (8) other pertinent information regarding the sale.
Step Two - Preview the Property
The Auction Brochure will provide instructions regarding your opportunity to preview the property prior to the auction. Often, there are numerous predetermined, on-site inspection dates and times beginning weeks before the auction. These on-site inspections provide an excellent opportunity for you to inspect the real estate and meet our auction staff to answer any questions you may have. We encourage you to bring any inspectors, contractors, or any other experts as you wish so that you can familiarize yourself with the real estate before auction day. It is important that the select dates and time are honored so as not to disrupt any tenants, employees, or neighbors with unannounced and unexpected drop-ins.
Step Three - Acquire the Bidder Packet
The Bidder Packet is a complete due diligence packet that is a requirement for every bidder at the auction to acquire. This extensive packet features valuable information regarding the offering often including extensive photographs, tax information, sources of financing, area information and property record cards, surveys and site maps, financial statements, copies of utility bills and repair receipts, environmental reports, detailed demographic reports, specimen copies of auction day Purchase and Sale Agreements, and other pertinent information that will lead to an informed purchase on auction day. We advise you to acquire the Bidder Packet early, and review with your attorney or other experts prior to auction day. The required Bidder Packets are typically available for a nominal charge to cover printing at any on-site inspection or by mail for an additional handling charge.
Step Four - Secure Your Financing
If you wish to finance your auction day purchase it is important that you arrange your financing prior to auction day. You will be glad that you had the ability to bid with confidence when achieving a commitment from your lender prior to the auction event. Many of our auction offerings will provide either a recommended source of financing with lenders that are already familiar with the real estate and have the ability to lend to qualified purchasers or financing will be available from the seller with details provided in the Purchase and Sale Agreement featured in the required Bidder Packet.
Step Five - Attend the Auction
Registration typically will begin one hour before the auction. You will be asked to show a photo ID and the Cashier's Check for the earnest money amount required for the property you plan to bid on, as listed in the Terms of Sale provided in the Auction Brochure. Upon meeting requirements to participate, you will be awarded a Bidder Card with a unique registration number you will use for bidding.
Before the auction begins, the auctioneer will make any Auction Day Announcements and introduce staff members or key personnel. The Terms of Sale will be reviewed and typically a "mock auction" is conducted, providing bidders with an opportunity to witness and participate in actual bidding before the real auction begins.
During the auction, Bidder Assistants will be available to answer any questions you may have including the bid amount the Auctioneer is asking for if you are unsure. You can raise your Bidder Card high to place a bid, or ask a Bidder Assistant to shout your bid for you. Remember, the Bidder Assistant is there to help and can usually get the Auctioneer's attention before you can, providing you with an edge over competing bidders.
If you are a successful bidder, a bidder assistant will collect your bidder card, driver's license, and Cashier's Check. If there are additional properties left in the auction, and you have additional Cashier's Checks in order to bid, then the Bidder Assistant can provide you with a new bidder card so you can continue bidding. If you are finished, then you may head to the designated contract waiting area, typically at the front of the room, and wait to sign the Purchase and Sales Agreement. Once called, you will be connected with a Contract Writer and will execute multiple copies of the Purchase and Sale Agreement that was provided to you in the Bidder Packet.