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Frequently Asked Questions – Short Sales
| Short Sale Basics |
| Q. What is a short sale? |
| A. A short sale typically occurs when a homeowner owes more on their mortgage than their home is worth. The mortgage company may then agree to accept less than the amount owed on the mortgage. This allows the homeowner to “short sell” the property, with the proceeds going to the mortgage company. This provides an alternative to the expensive and time-consuming process of foreclosure. |
| Q. What is the benefit of buying a short sale property? |
| A.Buyers can often save a significant amount of money with a short sale property. Since the lender will accept less than the amount a homeowner owes on the mortgage, the buyer may benefit from a reduced price compared to a traditional home sale. |
| General Questions |
| Q. May I attend a live auction to just watch? |
| A. Yes. However, only registered bidders will be granted access to our live events before the general public until we determine that there will be adequate space to accommodate observers. Venue fire and safety codes will ultimately dictate occupancy. |
| Q. How long will each auction last? |
| A. Generally, we are able to auction between 25 to 30 properties per hour at our live events, so things will be moving at a rapid but manageable pace for our bidders. The length of each auction is dependent upon how many properties are available for auction that day. You may refer to the auction day line listing in the brochure to estimate your own time to arrive. Please allow yourself sufficient time to attend our auction event so that you are able to take advantage of all the opportunities presented on auction day.
Properties brought for auction through our online-only bidding platform show the time remaining on the property detail page. We recommend that you use our online bidding demo to familiarize yourself with the process and maximize your bidding experience. |
| Registration |
| Q. Do I need to register to bid at the auction? |
| A.Yes. Registering is free and easy! We recommend that you register at least 48 hours prior to the auction day in order to receive information relating to the event. Note: You must create an account and register separately for each auction event listed in the auction calendar. Click here to create your Auction.com account. |
| Q. I am trying to register for the auction tomorrow, but I am having problems with the registration process. Who can I contact for help? |
| A.Registration for online-only auctions is available up to the auction ending date. Please contact customer service for assistance if you are having any problems registering. |
| Q. I forgot my password. How do I get back in to my account? |
| A.Click here to recover your password. Your password will be automatically emailed to your email address on file. |
| Bidding and Buying |
| Q. How do I bid on a Short Sale Auction? |
| A.To learn more about the online bidding process, click here.
To bid on a live auction, fill out the on-line Registration Form and remember to print it and bring it with you on the date of the Auction. You may also mail your Registration Form to Attn: Auction.com Registration, One Mauchly, Irvine, CA 92618. Your Registration Form should be received no later than two (2) business days prior to Auction day. Prospective purchasers who register on Auction day will be required to complete the Registration Form at that time. |
| Q. Do I need any experience to bid at one of your auctions? |
| A.No experience is necessary. Bidding is simple and registering as a bidder is FREE! Whether you are a first-time bidder or an auction veteran, you can attend one of our live auctions, explore and ask questions. Our staff will be happy to assist you in any way they can. After a few properties are auctioned and sold, you will see for yourself how easy the process is and be ready to bid yourself. We also conduct a "Bidder Seminar" roughly 30 minutes prior to the start of our live auctions to help familiarize you with the method and pace of bidding that the auctioneer will utilize. If you plan on bidding in one of our state-of-the art online events, please click here to practice online bidding beforehand to familiarize yourself with auction process. |
| Q. What do I need to participate in one of your auctions? |
| A. If you plan to bid and purchase a property at one of our auctions, you must have: For properties offered at one of our ONLINE BIDDING EVENTS, you’ll be required to place a registration deposit via major credit card hold of at least $1,000 (amount varies by property), and be prepared to submit the required Earnest Money Deposit via wire transfer. Be ready to submit financing prequalification forms, proof of funds to close, and any entity/trust documentation (if required) as well. For properties offered at a LIVE AUCTION EVENT, • A $2,500* or $5,000* cashier's check (made payable to yourself) or cash for the first property purchase. (A $5,000* or $10,000* cashier's check is needed to purchase each additional property.) • A personal check to pay the balance of the required 5% Earnest Money Deposit due on auction day. (A 15% Earnest Money Deposit is required on each additional property purchased.) • Valid photo identification for all parties involved in the transaction, issued by a government agency (driver's license, passport, etc.) * The required cashier's check amounts vary per auction, please reference the specific auction details and terms and conditions for required amounts. |
| Q. I registered for the website, but I can’t seem to bid. What can I do? |
| A.You may have created your profile with Auction.com, but did not register to participate in an online-only auction event. Please go to the property detail page, click on the “Register for this Auction” link and then follow the step-by-step instructions provided. |
| Q. Can I bid if I am not a US citizen? |
| A.Yes, anyone can bid! The registration and bidding processes are the same for all bidders |
| Q. What is a Pre-Auction bid? |
| A. Before a property is auctioned off, we allow buyers to present a Pre-Auction bid to the seller for consideration. If the Pre-Auction bid does not meet the seller’s threshold, you will be prompted to enter another bid. You will be given 5 attempts to hit the seller’s threshold 3 different times, for a total of 15 attempts. |
| Q. Does my bid have to conform to the minimum bid increment indicated? |
| A. No. You may place a bid that is higher than the minimum bid pre-populated in the bid amount box, but you may not place a bid that is lower. The bidding increments are programmed in the auction software and may change as the bidding period progresses. |
| Q. Can I bid on more than one property? |
| A. Yes. You determine your own bidding limits, and as long as you have enough funds you can bid on more than 1 property. Make sure that the sum of your bids does not exceed your personal bidding limit and takes into consideration the required 5% buyer’s premium automatically added to each winning bid amount. |
| Q. Can I purchase more than one property at an auction? |
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A. Yes. If you are planning to purchase more than one property, you must register as a "Multiple Bidder." Please view our Reserve Auction Terms and Conditions for details on the Earnest Money Deposit for multiple Property purchases. |
| Q. What if I want to bid on back to back properties? |
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A. You may bid on as many properties as you like provided the sum of your bids does not exceed your personal bidding limit. |
| Q. Can I set a maximum bid once the auction has started? |
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A. Some events may include a proxy bid period, where you are able to set a bid amount and we will bid up to that amount for you automatically. On events that do not include this feature, you must make bids yourself. |
| Q. Can I set a proxy bid? |
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A. Some events may include a proxy bid period, where you are able to set a bid amount and we will bid up to that amount for you automatically. On events that do not include this feature, you must make bids yourself. |
| Q. When does the auction end? |
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A. The first property closes at the posted end time and the remaining properties will end in numerical order at various intervals. A property may have extended bidding time added if a bid is placed in the final seconds of the auction. |
| Q. Do all the properties close at the same time? |
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A. No. Properties are scheduled to end in sequence, approximately 30 to 60 seconds apart on the date and time indicated on the bidder page. End times for some assets may be extended due to aggressive last minute bidding by multiple parties. |
| Q. What do I need to show for Proof of Funds? |
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A. Bank statements and/or investment statements dated within 60 days for stock, mutual funds, or bonds will suffice. |
| Q. How will I know if I am the winning bidder? |
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A. If bidding ends and you see a “SOLD!” message along with an indication that you are still the highest bidder, you will receive a winning bidder confirmation email shortly. The Purchase Agreement will need to be executed within 2 hours following the close of the online auction. Within 24 hours, one of our representatives will call you to explain the contracting process. |
| Q. I received an email stating I am the highest bidder, but no one has contacted me. What do I need to do? |
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A. You will receive an email when you are the highest bidder on a property. If at the end of an auction you have not received another email indicating you were outbid, you should receive an email indicating you were the winning bidder for this property. Within 24 hours, you will receive a phone call to walk you through the contracting process. |
| Q. If I am the winning bidder, can I assign my contract to someone else? |
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A. No. All parties who wish to buy must be present on auction day so that they can register for the auction and execute the necessary documents if they win. |
| Q. What if I change my mind? Can I cancel the transaction after the auction is over? |
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A. No. There is no rescission or "cooling off period." That is why it is important for you to conduct all of your due diligence and inspections prior to auction day and bidding on the property. Please review the auction terms and conditions for further information. |
| Q. Do you publish auction results? |
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A. No, we do not publish auction results. |
| Fees and Deposits |
| Q. What are the buyer’s fees on a Short Sale Auction? |
| A. A 5% Buyer’s Premium (or $2,500, whichever is greater) will be added to the winning bid amount to establish the “Total Purchase Price.” Example: If your winning bid is $100,000, a Buyer’s Premium of $5,000 (5%) will be added. The Total Purchase Price would then be $105,000. |
| Q. Is a deposit required in order to bid? |
| A. Yes, a bidder deposit is required to bid. We accept major credit cards and will authorize and place a “hold” for the amount of the bidder deposit. The deposit requirement may vary for each property, with a minimum deposit amount of $1,000. |
| Q. How much is the bidder deposit? |
| A. The amount required may vary depending upon the asset(s) in which you show an interest. The minimum amount required for the authorization and hold will be One Thousand Dollars ($1,000). |
| Q. Can I use my ATM/debit card for the bidder deposit? |
| A. Yes, but we recommend only using a major credit card for the bidder deposit. When we place a "hold" on your credit card, the credit account is not actually charged, but a debit card does not recognize this transaction. As a result, the transaction may either be rejected or the funds may actually be deducted from your account. |
| Q. How do I remove the hold on my credit card following an online auction? |
| A. If you are a successful bidder, the hold on your credit card will be removed within 24 hours of receiving the required earnest money deposit. If you did not purchase a property, the hold will be removed within 24 hours of auction end. |
| Q. I registered, but I wasn’t asked for a credit card. How do I submit my bidder deposit? |
| A. You may have registered to attend the live auction by mistake. Make sure you are registering for the online-only auction event. Please go to the property detail page, click on the “Register for this Auction” link and then follow the step-by-step instructions provided. |
| Q. What is the Earnest Money Deposit? |
| A. The Earnest Money Deposit is the amount of money you are required to put down on auction day if you win an auction. Online Bidding The Winning Bidder is required to pay the greater of five percent (5%) of the Total Purchase Price or $2,500, on any first Property purchase. For any purchase beyond the first Property purchase, the Winning Bidder is required to pay the greater of fifteen percent (15%) of the Total Purchase Price or $5,000. Some Properties may require an Earnest Money Deposit greater than five percent (5%) of the Total Purchase Price. Please check the Property details page and the Purchase Agreement and addenda regarding Property specific deposits. For any first purchase, the Earnest Money Deposit shall be no less than $2,500 ($5,000 in California). For any further purchases, the Earnest Money Deposit shall be no less than $5,000 ($10,000 in California). The Earnest Money Deposit must be paid by Wire Transfer or by Cashier's Check, both of which must be received by the escrow/closing agent no later than 48 hours following the Bidder being declared the Winning Bidder (including for Properties sold “subject to confirmation”). All monies will be immediately deposited with an escrow/closing agent or settlement attorney. The balance of the Total Purchase Price, along with all other costs and/or fees, must be paid as required in the Purchase Agreement. Regardless of the amount financed, the Earnest Money Deposit amounts required on Auction day will not change. Live Auction The Winning Bidder is required to pay the Earnest Money Deposit, which is the greater of five percent (5%) of the Total Purchase Price or $2,500, on any first Property purchase. For any purchase beyond the first Property purchase, the Winning Bidder is required to pay the greater of fifteen percent (15%) of the Total Purchase Price or $5,000. Some Properties may require an Earnest Money Deposit greater than five percent (5%) of the Total Purchase Price. Please check the Property details page and the Purchase Agreement and addenda regarding Property specific deposits. For any first purchase, the Earnest Money Deposit shall be no less than $2,500 ($5,000 in California) and the first $2,500 ($5,000) in California) of the Earnest Money Deposit must be paid by Cash or a Cashier’s Check (made payable to you). For any further purchases, the Earnest Money Deposit shall be no less than $5,000 ($10,000 in California) and the first $5,000 ($10,000 in California) of the Earnest Money Deposit must be paid by Cash or a Cashier’s Check (made payable to you). Any Earnest Money Deposit owed above the initial $2,500 or $5,000, (or in California, $5,000 or $10,000) as applicable, may be paid by cashier check, cash or personal check. All monies will be immediately deposited with an escrow/closing agent or settlement attorney at the Auction. The Earnest Money Deposit is not an “option” payment. The balance of the Total Purchase Price, along with all other costs and/or fees,must be paid as required in the Purchase Agreement. Regardless of the amount financed, the Earnest Money Deposit amount required on Auction day will not change. |
| Q. If I buy more than one property, what is my Earnest Money Deposit requirement? |
| A. Earnest Money Deposit requirements vary for Online Bidding and Live auctions. Online Bidding For any first purchase, the Earnest Money Deposit shall be no less than $2,500 ($5,000 in California). For any further purchases, the Earnest Money Deposit shall be no less than $5,000 ($10,000 in California). The Earnest Money Deposit must be paid by Wire Transfer or by Cashier's Check, both of which must be received by the escrow/closing agent no later than 48 hours following the Bidder being declared the Winning Bidder (including for Properties sold “subject to confirmation”). All monies will be immediately deposited with an escrow/closing agent or settlement attorney. The balance of the Total Purchase Price, along with all other costs and/or fees, must be paid as required in the Purchase Agreement. Regardless of the amount financed, the Earnest Money Deposit amounts required on Auction day will not change. Live Auction For any first purchase, the Earnest Money Deposit shall be no less than $2,500 ($5,000 in California). For any further purchases, the Earnest Money Deposit shall be no less than $5,000 ($10,000 in California). The Earnest Money Deposit must be paid by Wire Transfer or by Cashier's Check, both of which must be received by the escrow/closing agent no later than 48 hours following the Bidder being declared the Winning Bidder (including for Properties sold “subject to confirmation”). All monies will be immediately deposited with an escrow/closing agent or settlement attorney. The balance of the Total Purchase Price, along with all other costs and/or fees, must be paid as required in the Purchase Agreement. Regardless of the amount financed, the Earnest Money Deposit amounts required on Auction day will not change. |
| Q. How can I pay the Earnest Money Deposit? |
| A. For our live auction events, the first $2,500* or $5,000* of the Earnest Money Deposit must be paid by cashier's check or cash ($5,000* or $10,000* cashier's check for each additional property purchase). The remaining balance can be paid by personal check or by cash. You will be provided with a receipt on auction day showing that the escrow/closing agent received your Earnest Money Deposit. There are no exceptions to this requirement.
For online auction sales, you will be required to submit the entire 5% Earnest Money Deposit (15% for additional purchases) by wire transfer within 48 hours of the auction end. Specific wire instructions will be provided by our auction staff immediately following the sale. * The required cashier's check amounts vary per auction. Please reference the specific auction details and terms and conditions for required amounts. |
| Q. What if my Earnest Money Deposit required is less than the required cashier's check? |
| A. The first $2,500* or $5,000* of the Earnest Money Deposit must be paid in the form of a cashier's check or cash ($5,000* or $10,000* cashier's check for each additional property purchase). Change will not be given on Auction Day.
* The required cashier's check amounts vary per auction, please reference the specific auction details and terms and conditions for required amounts |
| Financing |
| Q. Can bidders provide their own financing? |
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A. Yes, but closing will not be extended in order to secure financing. Winning bidders using their own financing must provide a written unconditional lending commitment from their lender before bidding. Bidders may be required to complete a finance application with the designated lender even if a different lender will be used. |
| Q. Is financing contingency available for Short Sale purchases? |
| A. Yes, a financing contingency may be available if you submit a pre-qualification prior to placing a bid on the Short Sale property. You may select the option to pre-qualify during registration, or send a third party pre-qualification form to our auction staff by email to shortsaleprequals@auction.com or by fax to (800) 320– 3265. Please ensure the property address is clearly displayed on any correspondence. |
| Q. What does it mean when the property is listed as "Cash Only?" |
| A. It means that the buyer must qualify as a cash buyer without using a lender. Qualifying accounts are: bank accounts, CDs, mutual fund and stock accounts, 401K, IRA, and credit lines. |
| Q. When the property is listed as "Cash Only", do I have to have the cash at the auction? |
| A. You must have the Earnest Money Deposit on auction day, and be able to fund in cash by closing. |
| Q. What is the difference between a cashier's check and an official check or bank check and why must I have a cashier's check on auction day? |
| A. The terms "cashier's check," "treasurer's check," and "official check" are often used interchangeably. A cashier's check is a draft where the drawer bank and the drawee bank are the same. If the check is drawn by a bank on itself and is not captioned "expense check" or "dividend check" or "payroll check" or in any other way that makes it a special-purpose payment, consider it as fitting the definition of a cashier's check and making the funds available accordingly. A cashier's check has availability requirements defined under Reg. CC. and that is why a cashier's check is required as part of the Earnest Money Deposit. |
| Closing Process |
| Q. Can I see the property after the auction? |
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A. Winning bidders are not authorized to enter the property until close of escrow. Remember that all properties are sold as-is and there is no inspection contingency. |
| Q. I haven't received my contracts. What should I do? |
| A. Please contact customer service at 1-800-793-6107 and ask to speak with the Online Contracts Manager. |
| Q. Can I add another name on the contract after the auction? |
| A. All parties on contract must be added at the time the contracts are being drawn up. We cannot add co-buyers after the contract documents are sent out. |
| Q. What are the closing costs? |
| Ans. The closing costs that the buyer will be responsible for are set forth in the purchase documentation. |
| Title |
| Q. Can I choose my own Title Company? |
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A. Yes, however, if you have not chosen a closing company, we will be glad to recommend one in your area from our list of preferred closing companies. |
| Q. When will I receive title to any property I may purchase? |
| A. The closings are expected to occur within 45 days of the auction event. Please review the purchase agreement for additional information. |
| Q. Can I take title in my corporate name? |
| A. Yes, you can put the title in the name of a trust, partnership or corporate entity. To do so, you must fax your entity formation documents to (800) 618- 3007 prior to bidding on the property. |
| Q. What documents are required for corporations? |
| A. Articles of Incorporation, Bylaws, and Resolution authorizing the corporation and party signing Purchase Agreement to act on behalf of corporation in this transaction are required. |
| Q. What is required for limited liability companies (LLCs)? |
| A. Articles of Organization, Operating Agreement, and Resolution authorizing the LLC and the party signing Purchase Agreement to act on behalf of the LLC in this transaction are required. |
| Q. What do I need to take title in the name of a trust? |
| A. A Declaration of Trust and evidence that the party signing contract is trustee of the trust are required. |
| Q. What is required for a Partnership? |
| A. A Partnership Agreement and evidence of authority of the party signing contract are required. |
| We'll see you at the Auction!! |
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