Buying property in an online auction isn't quite as straight forward as buying a book on eBay, or a lamp from Kijiji. As a buyer you want to know as much as you can about the property, and the seller wants to know you can be relied upon to actually pay if you’re the highest bidder. So there are a few steps to take before the bidding starts.
Get The Information Up Front
The property up for auction should be exhaustively documented by third parties. This means a home inspection, lots of pictures of the property and grounds, a well inspection, water test, septic report, and anything else applicable to the property. Condominiums should have a status certificate.
If possible, it's a good idea to visit the property yourself and have a look. Pictures and layout maps can only tell you so much about a piece of real estate.
Understand The Rules
Before you can bid you will have to sign a bid certification form. This form is your declaration that you have read all of the details provided about the property and the agreement of purchase and sale. This is a binding transaction, so if you are declared the high bidder you will immediately sign for your purchase, leave a deposit check, and close on the date chosen by the property owners. Of course this also means buyers must have their finances in order before they bid.
You should also understand the rules of the auction, if there is a reserve price, or if the final bid is subject to confirmation. If the property is in a group of auctions that close together, you should understand how they work. If you have questions, direct them to the organization holding the auction in advance.
Typically, an online auction for property will be advertised for a period before the auction, and the event itself will last 7-14 days. With so much time, buyers do not have to rush. This format takes away the adrenaline, and in-the-moment bidding of a live auction, letting buyers take their time deciding whether to bid or not. It's a good idea to discuss the property with a Realtor, a spouse, an accountant, lawyer, or someone else you trust. Get a good idea of what the property is worth to you. How much are you willing to bid? Set a limit and do not go over without discussing it with all affected parties.
