Understanding the Home Auction Terminology

Buying property at a home auction can be a wonderful investment. It can be a way for you to get a great home for a lower price than if you were to buy one directly on the market. To get a home at auction though, you have to be the highest bidder. There can be others vying for that same property. Understanding how the home auction process works can help you to feel confident and take the uncertainty out of the process.

Understanding the Rules

There can be variations to the rules from one auction to the next. With that in mind, it is important to get information about those rules which will apply prior to going to such an auction. There is no cost to be in attendance and you don’t have to bid at all. If you do decide to bid, you will have to start at the opening price. As the price goes up based on more bidders, you can decide to increase your bid or to step down.

Set a Bid Limit

Before the bidding starts on a given property, make sure you have a set bid limit. Don’t exceed that. If the amount goes beyond that point, step down. Don’t get caught up in the competition of a bidding war with other participants. Some of them are ready to pay far more than you are for a given home. Let them have it!

Vendor Bid

There are times when the bidding stops before therequestedreserve amount is reached by the seller. With that in place, the auctioneer can declare this and state that the price isn’t enough to satisfy the sale of the property. If it is close enough to the reserve price set by the seller, they may agree to accept that amount of money. However, they do have the right to decline it, so a discussion will take place between the auctioneer and the seller.