QUESTION:
What should I expect when I attend a real estate auction?

ANSWER:
It's a good idea to attend auctions as a spectator before you bid on a house, just so you understand the process and are comfortable with it, auctioneers agree.

Before a house is sold, you can expect the auctioneer to describe the property, note whether the seller has specified a minimum price and specify whether the high bidder gets the title free and clear. The auctioneer might or might not list any defects in the house. Then the bidding begins.

BATTLING THE PROS

If you're looking for a home to live in, you could be at a distinct disadvantage at an auction because you're bidding against experienced investors who might plan to fix up the house and sell it. Their experience gives them an edge, but you have an advantage, too. You're looking for a house to live in, so you can probably bid higher than someone who is looking for a fast profit.

When you make the winning bid, you have to meet the seller's conditions:

You have to pay a deposit (the same as earnest money). The deposit price varies with each auction house, usually ranging between 10 - 25 percent.

You might have to pay a buyer's fee to the auctioneer, typically 10 percent, but many firms are opting not to charge this fee. This is similar to the commission paid to a real estate agent, except that the buyer, not the seller, pays this fee when a property is sold at some auctions.

The seller will want to close the sale within 14 to 30 days.

With all the worries and requirements that accompany buying a house at auction, it's no wonder that it's the road less traveled. Buying your house this way requires patience, persistence and risk-taking - but not foolhardiness.

QUESTION:
What do I need to do the day of the auction to participate in the bidding process?

ANSWER:
When you arrive at an auction site, read the rules printed or displayed on posters, brochures or handouts. Ask questions if you do not understand a policy. Inspect the property one last time.

In order to bid at an auction, you need to make contact with the auctioneer. To bid, hold up your bid card, your hand or shout "yes." The auctioneer will make eye contact with you, take your bid and immediately turn and seek another bid. You can remove yourself from the bid process at any time by shaking your head 'non' or saying "no" if the auctioneer turns your way. Should an auctioneer misinterpret any of your signals, report the mistake right away.