land auctions experince?

[Bszweda]

Just curious peoples experience with land auctions? I have a land auction coming up in my county with a property that's a 50/50 tillable / timber setup, and I am thinking about trying to bid on it. However a auctions to seems to put all the risk on the buyer so I am somewhat hesitant on proceeding. However part of me wants to at least prepare to be ready to bid just incase I think the property is listed for what I think is a fair price. Just wanted to get peoples input that have participated in one before and had any tips.

 

[cbw]

Go for it! We got our first property below market at auction.


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[Tree Spud]

Just curious peoples experience with land auctions? I have a land auction coming up in my county with a property that's a 50/50 tillable / timber setup, and I am thinking about trying to bid on it. However a auctions to seems to put all the risk on the buyer so I am somewhat hesitant on proceeding. However part of me wants to at least prepare to be ready to bid just incase I think the property is listed for what I think is a fair price. Just wanted to get peoples input that have participated in one before and had any tips.

What risk?

 

[Bszweda]

It seems with an auction a lot of the due diligence has to be done prior to the auction as once the bid is won your on the hook no matter what. Title search for liens, Survey, appraisal. ( without doing that prior to auction your at risk of getting burned) If I start spending money I might feel more inclined to spend more than I should once the auction gets going. In this instance I would need to finance some of it, and with this auction you need to close within 30 days. I've had finance people screw up papers on their side, which caused a delay of a week. So it makes me somewhat uncomfortable.

 

[DJN]

The auction company (at least the reputable ones) should have all that information. I was just at one this past week and they went through a 15 minute talk of having everything cleared (title/back taxes/liens/etc) and ready for transfer, as well as what was expected from the winning bidder (10% down day of, 10% buyer’s premium added to winning bid, close on property within 45 days or whatever is arranged) prior to actual auction. I would at least start with the auction company ASAP to see what info they can provide and then maybe a trip to the county auditor’s office if need be. Good luck!!

 

[buckdeer1]

Check it out before the auction,most of them have a viewing day set up.Auctions can be great to buy land and in fact I think only way better is when a neighbor calls and offers to sell you their land.

 

[bwoods11]

Hopefully the owner is not bidding on the land. That happened in Iowa and created quite a stir. If it’s legit, and top bidder buys the farm—then it’s not a bad way to buy.

 

[Tree Spud]

It seems with an auction a lot of the due diligence has to be done prior to the auction as once the bid is won your on the hook no matter what. Title search for liens, Survey, appraisal. ( without doing that prior to auction your at risk of getting burned) If I start spending money I might feel more inclined to spend more than I should once the auction gets going. In this instance I would need to finance some of it, and with this auction you need to close within 30 days. I've had finance people screw up papers on their side, which caused a delay of a week. So it makes me somewhat uncomfortable.

Yes, if under the circumstances you stated, there is a lot of risk.

I have bought 13 properties with 8 being vacant land. I used an attorney on 12 of them to review and insure that Title, Title insurance, closing docs, etc. were all in order. He caught issues on everyone. The property I did not use an attorney turned out to be a CF. An attorney should run you about $1k, well worth the money IMO. If you don't use an attorney, buying either direct or via 3rd party seller (realtor/auction) has same level of risk.

A 30 day close seems unrealistic these days with Titles companies backed up and current housing market. Get a copy of the purchase agreement ahead of time and make sure you understand it.

Given todays market, cash and no contingencies win. Do your due diligence so you are comfortable.

Good luck!

 

[chummer]

Hopefully the owner is not bidding on the land. That happened in Iowa and created quite a stir. If it’s legit, and top bidder buys the farm—then it’s not a bad way to buy.

I went to one here and the property went for way under market value. after the auctioneer announced it sold he turned to seller and asked if they were going to pay the bid price. The seller did, so he bought his own property back but had to pay the auctioneer his fee. Kind of a messed up way to see if you Can sell your property.

 

[bwoods11]

Yes, if under the circumstances you stated, there is a lot of risk.

I have bought 13 properties with 8 being vacant land. I used an attorney on 12 of them to review and insure that Title, Title insurance, closing docs, etc. were all in order. He caught issues on everyone. The property I did not use an attorney turned out to be a CF. An attorney should run you about $1k, well worth the money IMO. If you don't use an attorney, buying either direct or seller has same level of risk.

A 30 day close seems unrealistic these days with Titles companies backed up and current housing market. Get a copy of the purchase agreement ahead of time and make sure you understand it.

Given todays market, cash and no contingencies win. Do your due diligence so you are comfortable.

Good luck!

How do you get an attorney to review the parcel before the auction ?

 

[Tree Spud]

How do you get an attorney to review the parcel before the auction ?

That's the buyers job.

 

[bzb_1]

Ive bought 3 properties through auction...Well 5 but we backed out of one and lost our deposit and one there was title issues and we got our deposit back. Not too difficult. We have an attorney we use to do the title searches etc.

 

[bwoods11]

Ive bought 3 properties through auction...Well 5 but we backed out of one and lost our deposit and one there was title issues and we got our deposit back. Not too difficult. We have an attorney we use to do the title searches etc.

If you have the ability to back out, that makes sense. Many auctions have non refundable earnest money and sold “as is where is”.