How To Bid At Auction

Be Prepared

Become familiar with the auction and bidding process by going to and observing several auctions. When you are ready to buy at an auction, familiarize yourself with the property, the location and determine your bidding strategy and limits.

Financing

Generally speaking, there are no mortgage contingencies for properties sold at auction. Auction terms typically requires the purchaser to close on the property within 30 days of the auction date. Sometimes the terms may be longer or shorter. If you are the successful high bidder at an auction, your deposit may be non-refundable. Be sure to know what you can afford to pay and, if needed, that you will be able to get any necessary financing prior to bidding at the auction.

Auction Schedules

Auctions, and particularly foreclosure auctions, are often subject to be postponed or cancelled. Information regarding postponements or cancellations will be posted on our web site once that information is received. However, sometime this information does not become available until the last minute before the scheduled auction. Call or visit our website to view the auction calendar for the most recent updates to our auction schedule.

Property Information

Research the property by performing your own due diligence. We suggest that prospective purchasers check the public records and check with the city or town tax collector to determine what municipal taxes and fees may be owed on a property. When you buy at a foreclosure auction, you are also buying the property subject to any senior liens including municipal taxes and fees. Properties at auction are sold on an “as is”, “where is” basis. There are no contingencies in the memorandum of sale (purchase and sale agreement) for property condition.

Bidder Registration

In order to participate and bid at an auction, one must have the appropriate deposit amount, as stated in the mortgagee’s sale of real estate notice. The deposit should be in the form of cash or a bank treasurer’s check, made payable to yourself. Unless otherwise indicated, auctions take place at the property address. Registration is done on-site at the auction. All deposits must be shown to the auctioneer along with a photo ID in order to register to bid at the auction.

High Bidder

When the property is sold, the highest bidder will be required to endorse the check over to the attorney, auctioneer or mortgagee’s representative immediately after the sale and deliver the check to the auctioneer. The successful high bidder will be required to sign multiple copies of the memorandum of sale and possibly a memorandum of terms and conditions of sale prior to leaving the auction site. Unless otherwise indicated, and in most cases, the balance of the purchase price will be due in 30 days.

Glossary

Auction: An open invitation for offers, for the sale of goods or real estate.

Auctioneer: A person licensed by the state who conducts an auction.

Back-Up Bidder: The second highest bidder. Many mortgagees reserve the right to sell the property to the second highest bidder if the first bidder defaults.

Bid Increments: Acceptable dollar advances as determined by the auctioneer.

Buyers Premium: A percentage of the high bid at an auction which is added to the high bid to determine the purchase price.

Creditor: One who is owed money.

Deed: A legal written instrument that transfers or conveys ownership in real estate.

Deed of Release: Commonly used to free property from a mortgage lien. Also known as a discharge.

Default: Failure to meet a contractual obligation when due.

Encumbrances: A claim or lien on real or personal property.

Fair Market Value: A price agreed upon by a willing buyer and a willing seller.

Foreclosure: A legal procedure by which property pledged as security for a debt is sold by a lender in the event of a default by a borrower.

Foreclosure Deed: Document recorded at Registry of Deeds conveying ownership to high bidder at Mortgagee’s Foreclosure Auction.

Junior Lien: Liens recorded after the date of the mortgage being foreclosed on. Technically, wiped out at a forclosure sale.

Lien: A legal claim on one’s property for satisfaction of a debt.

Memo of Sale: Sales agreement signed by the successful bidder, the auctioneer, and the seller. Contains the terms of sale.

Mortgage: A legal document pledging real property to cover a debt.

Mortgagee: The individual holding the mortgage. The property is pledged to him as security for a loan. Also known as the lender.

Mortgagor: The property owner who mortgages his/her property as security for a loan. Also known as the borrower.

Municipal Lien Certificate (MLC): Supplied by city/town municipality to show outstanding real estate taxes, water, sewer or other municipal liens.

Personality: Property that cannot be considered realty. It consists of personal property and possessions, such as household furnishings, tools…

Qualified Bidders: Persons who can bid on a property because they are in possession of the cash or certified funds in the amount of the deposit stated in the auctioneers advertisement and properly registered at the sale.

Senior Liens: Liens recorded before the date of the mortgage being foreclosed on. These liens are the responsibility of the successful bidder.

Title: Legal evidence of the right to posses property.

Title Insurance: Insurance against loss resulting from title defects.