Buyers FAQ

If you are a buyer looking for opportunities to acquire assets at your price welcome to SVN’s dedicated and integrated auction website. We appreciate your interest and know your time is valuable with searching the market for assets that meet your purchasing criteria. The amount of distressed inventory in the market today is at record levels; however, many times buyers are frustrated with the spread that exists between the bids and ask price particularly with institutionally owned real estate. Our team recognizes that for buyers to be successful with acquiring properties at auction, a sizable amount of pre auction due diligence is necessary which dictates spending time, resources and often times money to underwrite the asset and become most informed in order to place conforming bids at acceptable prices. Our goal is and has been to create an auction process of equality and transparency for buyers so that upfront you know how to spend your time with preparing for our auctions and be successful with buying properties. Our advisors are also available to assist you and help you become more knowledgeable about a market or property we are representing. We look forward to bringing you more purchasing opportunities at auction and thank you again for your interest in our firm.

It seems as though more properties today are being offered at auction. Why is that?

The Sellers’ of the properties posted on our website have selected the accelerated marketing method in order to sell their properties in an orderly and timely manner. Part of their reasoning includes the asset holding costs associated with property ownership (e.g. real estate taxes, insurance, association dues, the cost of money, etc). Other reasons include the need to sell. The Buyer(s) should be able to obtain these properties at reasonable prices. The Sellers will be able to obtain an expedited transaction.

Where is additional information located for the properties?

Extensive Property Information, as available, is posted in the property data vault for that particular asset and may be viewed on our web site www.svnauctions.com to assist interested prospects and brokers with beginning their due diligence and buyer momentum process. For further information contact the listing broker for that property or our corporate offices at 877.765.3786.

 

What does it mean to buy the properties in 'as is' condition?

At our auctions buyers purchase the properties “as is” with regard to the condition of the properties. Buyers must rely entirely on their own information, judgment, and inspection of the properties. The Sellers will provide clear and marketable title to the properties.  Buyers purchase the assets in their “as is” state of condition as of the time of their purchase. It is important and strongly recommended for all interested prospects to fully inspect the condition of the properties of which they have an interest prior to bidding.

How do I inspect and preview auction properties and perform a property inspection?

Most of our improved properties are open for inspection on designated dates and times for interested prospects to tour and inspect the property. Additionally, our listing broker representative for that property will be on site to assist and answer any questions regarding the property. Please feel free to bring your consultants with you to the previews.

Can I use the services of a real estate broker to assist and represent me?

Broker Registration is not only welcomed but encouraged at our auctions. We believe the brokerage community is vitally important to the auction process. We provide equitable and fair compensation to them for their efforts offering you guidance and with assisting you in the pre-sale due diligence. Broker Registration Forms are posted in the document vault with specific qualification terms for that property or offering.

 

What is a Buyer's Premium?

Buyer’s Premiums are added to the bid price to determine the total purchase price. Example: Ten Percent (10%) Buyer’s Premium. If your bid was $750,000 on a property, then the total purchase price paid would be $825,000 ($750,000 plus $75,000 Buyer’s Premium). In order to purchase the property for $750,000 you need only to bid $680,000 so when the 10% ($68,000) is applied, your total purchase price paid would be $748,000.

Do I need to pre-qualify with you or a lender in advance?

Although this is not a requirement, in today’s capital markets with stricter lending guidelines, we encourage you to pre-qualify with a lender of your choice in advance to determine if they will underwrite the property and offer you a financing commitment with specified terms so you will be informed in advance as to your financing options. Remember that the bid deposit on auction day and full escrow payment you submit is not contingent upon obtaining financing.

What does the term 'High Bidder's' choice mean?

Properties that are identifiably similar (such as office condominiums or residential lots) are often sold using the high bidder’s choice method. The high bidder or winning bidder of a given bidding round may select from all of the available lots in the group or pool, and choose more than one at their winning bid amount. Example: If the winning bidder in a bidding round chooses three lots, their bid amount is multiplied by three. In order to have your preferred choice, you must be the highest bidder in that bidding round of available product. As the winning bidder in each bidding round selects their choices, those properties are marked sold and are no longer available for purchase and the process continues until all properties have been selected and sold.

What do I need to do to bid at the auction?

Carefully review the Property Information and complete any further due diligence that is important to you to determine your level of interest. If you have any concerns about the property or process, seek out professional advice. Specifically, review and understand the asset purchase and sale agreement as this document will not be altered or modified once you have been declared the successful purchaser under the terms and conditions of sale. Once you have determined that you wish to bid you will be required to:
a) Register with your full contact name and other important information;
b) Sign the terms and conditions of sale;
c) Post and make the required bid deposit;
d) Register your broker on the required form, if you are using one.

What happens if a high bidder defaults and fails to close on an auctioned property?

The defaulted bidder loses their full escrow deposit per the terms of the asset purchase and sale agreement. We will immediately notify the backup bidder in order to secure a new purchase and sale agreement at the back up bidder’s highest bid amount. If not successful, the property is made available to all other registered bidders and the open market.

Can I make a pre-emptive bid or offer on a property prior to the auction?

Yes. We will write and present on the seller’s pre approved asset purchase and sale agreement any reasonable presale offers to the owner for consideration. We strongly recommend that you make your best offer at this time.

What are the types of auctions you conduct?

Absolute Auction: An absolute auction means the property is advertised and sold to the highest bidder regardless of price with no minimums and no reserves.
Published Minimum Bid Auction: The published minimum bid is advertised and disclosed and represents the amount at which the seller has committed to sell the property either at that disclosed price or any price above that published minimum bid amount.

What is a Sealed Bid Auction?

A sealed bid auction mirrors the same processes as a traditional auction. The major difference is that all bidders must submit their initial bid in a sealed envelope all in accordance with the terms and conditions of the Sealed Bid Auction. The initial bids are then opened and reviewed by the seller as to conformity and compliance with the terms and conditions of sale. Frequently, the highest bidders in a competitive price range are invited to a private, live auction, with the highest “sealed bid” amount received being the opening live bid.

What about the title? Will I buy a property with unpaid back taxes or liens?

With very few exceptions which would be prominently noted, our auction properties are sold with good, insurable title having no liens, judgments, mortgages, or back taxes. If for some unforeseen reason a title cannot be cured, the escrow deposit is refunded to the Buyer; however, buyers must refer to the terms and conditions for each auction prior to bidding.

What are the Terms and Conditions of the sale?

The Terms and Conditions for each auction govern the sale process. They include and highlight information on the buyers and sellers responsibilities in the transaction such as the required certified deposit amount for being eligible to bid, when the sale of the property will close, buyer’s premium amount and other key facts. You should always familiarize yourself with the terms and conditions prior to the auction and placing a bid. The Terms and Conditions are posted with other important information in the document vault for that property or offering. You should also note that at an auction sale, any announcements made by the auctioneer on the day of sale take precedence over any previously published information or marketing materials.

How will the property be conveyed if I am the successful bidder and purchaser?

Generally, our properties are conveyed to the new purchaser at closing by Warranty Deed, free and clear of liens and encumbrances. Title insurance is available and is usually a cost paid for by the new purchaser unless otherwise noted.  Again it is important to read the Terms and Conditions of each auction for more detailed specifics. Closing costs are primarily governed by the state in which the property is situated.

Still have questions?

Not every question can be answered in this format. Some questions require answers beyond what we can provide in a general FAQ format. For additional info contact SVN Auction Services at 866-233-3237 or email us at info.auctions@svn.com

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