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Auction - F A Q - Part 1 - Definitions

By Vicky Carlton

Real Estate Agent Ohio

April 11, 2007 02:53 PM

FAQ

What is a real estate auction?

A Real Estate Auction is a method of buying and selling real estate. It is an intense and accelerated real estate marketing process that involves the public sale of property through open, competitive bidding.

What is an absolute auction?

An absolute auction is a public auction without a reserve or minimum. This means that the property, once the auction begins, it will be sold that day. (OHIO)

What is a reserved auction?

A reserved auction is a public auction with a reserve or minimum. This means that the auctioneer will determine whether to pass the property and not sell it based on the owners reserve or minimum price. Some properties are sold with 24 hour owner confirmation, these are reserve auctions as is minimum bid auction may still require owner confirmation.

If auction type is not specified it is defaulted to reserve auction.(OHIO)

What are the general differences between a public auction and a foreclosure?

Generally, a public auction is property for sale by owner either by the owner or thru an agent (Realtor/Auctioneer). The owner is not in financial distress, but has concluded that selling the property via the auction process is the most effective method. More and more people are finding that selling their real estate at auction to be the best way to maximize value in a very timely manner. The owner may be a lending institution who has obtained the property thru foreclosure action. If the home being sold by an owner who lived in the property, they must fill out the Ohio Disclosure form and Lead paint disclosure form. The disclosure forms do not provide any warranty in an "as is where is" auction. Read buyer packet to determine type of deed being used to transfer the property. It is highly recommend that the buyer buy owner's title insurance.

A foreclosure, on the other hand, is a forced sale by creditors. These auctions are sight-unseen and are generally held on the courthouse steps of whatever county the property is located by the sheriff. Depending on the county the owner may have a right to redemption on the property. You are buying "as is where is", and you will receive a sheriff's deed.

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Rich Kruse

Gryphon USA, Ltd. - Columbus, OH

Hi Vicki - This is great. Both you and Doug posting on auctions in the same evening.

In Ohio there is a statue that allows secured creditors to engage auctioneers as substitute trustees to take the place of the local sheriff for foreclosure auctions. I have been working with a couple of attorneys to make this more common. I hope it works out as I think privatizing the sheriff auction will get more money for the banks.

Apr 11, 2007 02:58 PM

Mary Pope-Handy

Christie's International Real Estate Sereno - Los Gatos, CA

CRS, CIPS, ABR, SRES, Silicon Valley

A friend of mine bought her home in Australia by auction. She told us that this is often the way it's done there - and that it is VERY nerve-wracking because it is SO sudden.

I am just starting to hear about it here in California.

Thanks for an interesting post!

Apr 11, 2007 02:59 PM

LLoyd Nichols

Premier Florida Realty of SWFL - Fort Myers, FL

Southwest Florida Homes By The Sea

Thanks for a very informative post. Auction, specially reversed auctionmay be the answer for many.

Apr 11, 2007 03:01 PM

Bob Force (REALTOR®)

Weichert Realtors - Aspen Hill - Mount Airy, MD

The FORCE in Maryland Real Estate

Vicky:

Thank you for the information, will be reading the 2nd and 3rd installments.

Apr 12, 2007 03:18 PM

Anonymous

Mike Brandly, Auctioneer

A foreclosure, on the other hand, is a forced sale by creditors. These auctions are sight-unseen and are generally held on the courthouse steps of whatever county the property is located by the sheriff. Depending on the county the owner may have a right to redemption on the property. You are buying "as is where is", and you will receive a sheriff's deed.

So far as this above information, a foreclosure is requested by lien holders in a lawsuit, and the Court orders the auction. The auction properties at this point still belong to the borrowers, so they are open as any other property would be, subject to the owner. Exceptions include situations where a receiver has been appointed by the Court, and the receivership then controls access. State law in Ohio (every county) mandates that there is a right of redemption up until the confirmation, which follows the auction.

Rick, I'm familiar with R.C. 2329.151 which simply says that anyone ordered by the court, or a licensed auctioneer may conduct a judicial ordered auction. Is there another statute that deals with this?

Apr 12, 2007 03:20 PM

Charles Parrish

Auction Brokers & Investors United - Baltimore, MD

At times we will offer a property that is in foreclosure and attempt to sell it at our auction before the foreclosure auction. The F/C auction is a legal proceedure to transfer owernship from the mortgagor to the mortgagee.

As an auction company, we will do a better job marketing the property than the F/C sale. We will often notify the lender to let them know that the mortgagor has contract with us to sell their property subject to the acceptance of the lender. This sale is always time sensitive.

Apr 13, 2007 07:19 PM

Jason Smith

DreamDirt Auction - Mondamin, IA

Great information, thanks for the great post.

Jan 04, 2008 11:35 AM

Auction - F A Q - Part 1 - Definitions

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