A Buyer’s Guide to Success
The real estate industry faces a significant blind spot: many traditional agents and brokers lack an understanding of how real estate auctions work, despite a legal obligation to possess “subject matter expertise” for the services they provide. This document provides a clear, actionable explanation of auction operations and why traditional real estate rules do not apply.
A Buyer’s Guide to Success
VIEW the PROPERTY
PUBLIC SHOWING:
Suchedule
Your
Inspection
REGISTER for SHOWING
BOOK APPOINTMENT
(Proof of Funds &
Identity Required)
PROPERTY IS OPEN
FOR INSPECTION
Buyers, Agents,
Inspectors, Contractors
Invited to Inspect
Home & Lot
(Inspectors are Required
to Pre-Register)
MESSAGE TO SCHEDULE
TEXT: “1036 Private Road 8905”
to 469-460-4848
The Golden Rule: “The Fall of the Hammer”
In a traditional home sale, the timeline allows for contingencies such as home inspections or mortgage approval. Auctions completely reverse this.
- Before the Auction: This is when all due diligence occurs. You must view the property, read the due diligence packet, review titles, arrange financing, and complete inspections before placing a single bid.
- The Fall of the Hammer: The auctioneer’s gavel drop officially sells the property, creating a binding, non-contingent contract.
- No Post-Auction Negotiation: You cannot renegotiate price, ask for repairs, or backout due to financing. Failure to follow through results in the loss of a non-refundable earnest money deposit and potential legal action.
Real Estate vs. Traditional Sales
| Feature | Traditional Home Sale | Real Estate Auction |
|---|---|---|
| Contracts | Contingent on financing/inspections. | Absolute, non-contingent. “As-is, where-is.” |
| Negotiation | Happens after an offer is submitted. | Happens before by setting bid limits. |
| Timing | Often stretches over many weeks. | Immediate sale; strict 30-day closing. |
| Fees | Commissions typically paid by seller. | Often includes a “Buyer’s Premium.” |
What This Means For You
If you are looking to buy a property at an auction, it is critical to assess your representation.
Assess your agent: Ask your real estate agent how an absolute auction or a reserve auction works. If they tell you that auctions “don’t comply with the real estate industry” or they dismiss them out of hand, it usually means they just don’t know how they work.
Assess your agent: Ask your real estate agent how an absolute auction or a reserve auction works. If they tell you that auctions “don’t comply with the real estate industry” or they dismiss them out of hand, it usually means they just don’t know how they work.
- Auctioneer Rights:
- Process and execute bids that satisfy the seller’s rights of (reservation, liberty of bidding, counter-bidding, etc.)
- Terms and Conditions:
- Subject to Online or Offline Terms, Conditions of Sale, Offer, Price, Seller Confirmation
- 15% Buyer’s Premium
- Registration Requirements:
- Buyer
- Buyer’s Agent
- Create Profile
- Register for Auction
- Memorandum of Sale: To be signed at bid award.
- Pre-Registration: Available online
- Auctioneer License: TDLR 17057
15% Auctioneers Fee is Added to the HIGHEST BID
TEXT: “1036 Private Road 8905” to 469-460-4848
Information About Brokerage Services
Texas Real Estate Commission Consumer Protection Notice
To Contact the Texas Department of Licensing and Regulation
Myers Jackson License Disclosures
