Sold “Subject to” Acceptance or Confirmation
- When a property is sold “subject to,” it means the property is being sold subject to the seller’s approval. Sellers set a Reserve Price, which is the minimum they will accept. Sometimes, the highest bid is still below the Reserve Price. When this happens, the sale is “subject to” the seller’s acceptance.
- Another term used at Auction.com is sold “subject to the seller’s confirmation.” In this instance, the sellers do not accept the bid right away so the sale is subject to their confirmation, meaning they have a set period of time to either accept or reject the offer.
Some properties sold on Auction.com require a “Buyer’s Premium,” a fee that the winning bidder pays to Auction.com. The Buyer’s Premium is usually 5% of the winning bid or $2,500, whichever is greater and will be added to the winning bidder’s offer amount. Please note: This fee is only required if you are the winner. We also have properties that do not require a Buyer’s Premium. You can search the site for properties that don’t require a Buyer’s Premium or you can check two places on the property details page.
- First, look at the top right of the page. Beneath the box that shows the starting bid, there are some icons. The icon with a “percentage sign” labeled Buyer’s Premium indicates that the fee is required.
- Second, look just below the photos. You will notice a property details section. If there is a Buyer’s Premium, it will be housed in this section, usually on the right side.
Earnest Money Deposit
The Earnest Money Deposit is a deposit that you put down on a property to let the seller know that you are serious about buying it. The Earnest Money Deposit is required by the seller – not Auction.com. It goes toward the final closing costs – it’s not an extra charge. The deposit requirements are located on the property details page under the transaction details section, so make sure to check prior to bidding.
- The required amount is typically 5% of the total purchase price or $2,500 (whichever is greater).
- If you are the winning bidder, you will receive a call from our contracting department confirming which escrow company will be handling your closing. In certain instances, you may choose your own escrow company. After the contract is signed, you will submit your Earnest Money Deposit to the designated escrow company usually by wire transfer. You will need to send us a copy of the escrow company’s receipt of the Earnest Money Deposit.
Proof of Funds
The winning bidder will need to provide Proof of Funds following the auction. Proof of Funds will be required whether you are purchasing with cash or obtaining financing. If you are obtaining financing, please provide your loan pre-approval letter. Proof of Funds must be in the form of cash, cash equivalent or readily marketable securities listed on a major exchange (New York Stock Exchange, NASDAQ) and must be available immediately without restrictions. Some examples of acceptable Proof of Funds include:
- Recent bank statements
- Brokerage account statements (stocks, mutual funds, ETFs)
- Bank letters
- A line of credit that is ready to use
Buying Under a Separate Entity
If you plan to buy property as a separate entity, here’s what you need to know.
You may purchase properties under different entity types. Please seek professional and/or legal advice regarding which type of entity meets your business, tax and liability needs. There are specific documents you must submit for each entity.
Below are links to the required documents for certain entity types:
- Limited Liability Company (LLC) – A limited liability company encompasses the tax treatment of a partnership or sole proprietorship and the liability treatment of a corporation. Please download the requirements document for this entity.
- Incorporation (INC) – A corporation is an entity that is separate and apart from its owners, and there are various types of corporations. Please download the requirements document for this entity.
- Limited Partnership – A limited partnership (LP) consists of two or more partners who operate the company jointly and each partner’s liability may be limited to each partner’s level of investment. Please download the requirements document for this entity.
- Trust – A trust is an entity that acts as a fiduciary that manages and transfers property for the benefit of the beneficiaries. Please download the requirements document for this entity.
To buy property under any of these entities, you are also required to submit the following Auction.com documents:
To learn about what you’ll need for each type of entity, download the Residential Entity Requirements document.
For any additional questions, please contact our Online Contracts Entity team at (800) 320-3226.
Winning the Auction
If you are the winning bidder, congratulations! Here’s what to expect:
- You will need to verify your personal information so a purchase agreement can be generated.
- After your information is verified, you will be assigned a contract specialist to assist you.
- Next, you will receive a link to the purchase agreement. Sign it and either, upload or fax it back.
- The next step is to wire your Earnest Money Deposit. Your contract specialist can assist you.
- Send the Earnest Money Deposit to the title company within 48 hours of receiving the transfer instructions (unless otherwise specified in the Purchase Documents).
- You will be asked for your receipt of the sent Earnest Money Deposit, as well as your Proof of Funds, which you will need to email back to your contract specialist.
- If the property is being sold outright, your Earnest Money Deposit will be applied toward your purchase and you will be assigned a closing specialist.
- If the property is being sold “subject to the seller’s confirmation,” the seller can take 5-10 days to decide. If the bid is not accepted, your Earnest Money Deposit will be returned. If it is accepted, your Earnest Money Deposit will be applied toward your purchase and you’ll be assigned a closing specialist.
- The closing specialist brings all parties together by working with your agent, if applicable, the seller, title and escrow companies to ensure a smooth and efficient closing process.
- The closing process can take 30 to 60 days.
Download an in-depth DocuSign Sign On Paper Process.
After you close on the property, you will be the legal owner. But unlike traditional sales, the seller does not provide the keys. You are responsible for gaining access to the property and if the property is occupied, you may want to contact a real estate attorney for assistance.