.jpeg)
So, you've set your sights on a piece of land and you've discovered it's being sold at auction. Exciting! But land auctions can be fast-paced and involve unique terminology. Don't worry, this glossary will equip you with the knowledge to navigate the auction with confidence.
Absentee Bid: Don't want to attend the auction in person? An absentee bid allows you to submit your maximum offer in writing beforehand. The auctioneer will bid on your behalf up to your limit.
Buyer's Premium: This is an additional fee added to the final bid price, typically a percentage paid by the winning bidder to compensate the auction company for their services. Be sure to factor this into your budgeting.
Closing: Similar to a traditional real estate sale, closing refers to the finalization of the purchase. This involves paperwork, title transfer, and final payment.
Hammer Price: Also known as the "knock down" price, this is the final winning bid amount announced by the auctioneer.
Opening Bid: The first bid placed on a property, which sets the starting point for the auction. This may be set by the seller or the auctioneer.
Reserve Price (Reserve Auction): In a reserve auction, the seller has a minimum acceptable price they won't go below. Bids below the reserve won't win the property, and the seller has the right to reject all bids. Not all auctions have reserves, so be sure to clarify this beforehand.
Sold "As Is, Where Is": This means the property is being sold in its current condition, with all faults and imperfections. The buyer assumes full responsibility for any repairs or improvements needed.
Title: Legal ownership of the land. After the auction, the title will be transferred from the seller to the buyer upon successful closing.
Upset Price (Absolute Auction): Unlike a reserve auction, there's no minimum price in an absolute auction. The highest bid, regardless of amount, wins the property.
Due Diligence: This is the crucial research you, the buyer, should conduct before bidding. It involves inspecting the property, reviewing title reports, and investigating any potential issues like zoning restrictions or environmental concerns.
Preview: Many auctions offer preview dates where you can visit the property in person to assess its condition and suitability for your needs. Take advantage of this opportunity!
By understanding these key terms, you'll be well on your way to participating confidently in your next land auction. Remember, research is key! Familiarize yourself with the specific auction terms and conditions outlined by the auctioneer. Don't hesitate to ask questions to ensure a smooth and successful bidding experience.
Happy Land Auction Hunting!
Heritage Brokers & Auctioneers® are your one-stop shop for all things real estate and auctions in the Kansas City area. They specialize in lifestyle real estate, from charming homes and sprawling land to commercial properties and businesses. Their auction expertise shines with a variety of services, including farm and land auctions, estate sales, and even benefit auctions. With their extensive network and marketing prowess, they'll ensure your property gets the exposure it deserves. Call 877-318-0438 for more information on one of our amazing properties and/or land locations.