How to Bid at Auction

This is my first auction and I'm not sure how to bid?

Step 1: Register to bid by filling out a bidder card at the registration table. By registering to bid, the buyer acknowledges that they have reviewed and understand the information in the bid packet and the Contract of Sale agreement. The bidder also acknowledges that immediately following the auction, they are prepared to execute the Contract of Sale agreement and pay the appropriate deposit at that time in a form that has previously been deemed acceptable to the Auction Company.

Step 2: Determine how much you are willing to pay for a piece of property. Since your needs and desires are unique, your evaluation of the property will be different from anyone else’s.

Step 3: As the auctioneer progresses in his call for bids, simply raise your hand when you want to bid. If you’re not sure if you’re in or out, raise your hand again and the auctioneer will keep you in. He will not let you bid against yourself. The auction will be conducted under the total control of the auctioneer.

Step 4: If you have any questions, motion for one of Higgenbotham’s Auction Team members. These ringmen are here to help you understand the process completely.

What does the term "reserve" mean?
Under a reserve auction the auctioneers will submit the highest and best bid to the seller. The seller has the right to accept or reject that bid. If the property is not labeled as absolute, it will be sold on a reserve basis.

What does the term "absolute" mean?
In an absolute auction, the property will be sold to the last and highest bidder regardless of price.

Do I need to pre-qualify?
No. We normally do not require any pre-qualification to bid; however, if you intend to obtain bank financing, the bank will require you to qualify for their loan. The deposit you make on auction day is not contingent upon financing.

What is a buyer's premium?
A buyer’s premium is a percentage that is added to the bid price to determine the total purchase price. In most auctions there will be a 10% buyer’s premium added to the successful bid amount to create the total purchase price.

How much money do I need at the auction?
The Earnest Money (pursuant to the Contract of Sale) is normally 10% of the purchase price; will be non-refundable (except as otherwise provided in the Contract of Sale); and due on the date of auction in the form of a Cash or Cashier's check. The balance of the contract purchase price shall be due at closing.

Explain the process of "high bidder's choice".
At some auctions we use a method of selling called "High Bidder's Choice". It is a simple process that is much harder to explain than it is to understand.

When you go into an ice cream store you go through a two step process. First, you choose what size cone you want (how much your willing to pay). Second, you choose what flavor you want (what parcel).

High bidder's choice works the same way. First, there is a round of bidding to determine the price of the parcel. Second, as the successful bidder, you have your choice of parcels. You may choose one parcel or as many parcels as you like.

Ex. Assume there is a piece of property that is 100 acres in total. There are five parcels, each of which has 20 acres. The property will be sold "dollars per acre", "high bidder's choice".

The bidding commences and you are the high bidder at $3,000 per acre. Since you are the first high bidder, you have your choice of any parcel. Let's say you choose parcels #2 & #3.

Those parcels are marked off and a new round of bidding commences. The next high bidder will have their choice of any parcel except #2 & #3.

The process continues until all parcels are sold. Then the "regroup process" begins.

Again, not all auctions are sold by the method of "high bidder's choice". Check with a member of the Auction Team regarding any particular sale.

What happens if I get "regrouped"?
The regroup process is phase II of High bidders choice.

Let's continue the above example. Assume at this point in the auction there are high bidders on all the available parcels.

Now, assume someone asks for a regroup of parcels #2, #3, and #4. That means, those three parcels will be sold again, but as a group. If you want to protect your parcels, you'll need to bid on the total group.

Do I have to be the high bidder on a parcel to request a regroup?
Many times we will require a person be the high bidder on at least one parcel before they can request a regroup. The parcel they already purchased does not have to be a part of the regroup.

This rule varies in its application from auction to auction.

I want to buy a small parcel. How do I keep from being regrouped?
While no one can guarantee you won't be reqrouped, there are two ways to help avoid it.

I) Buyers interested in purchasing large parcels, seldom can afford to pay as much per acre or square foot as the single parcel buyer. By paying a higher price in the first round you'll reduce the large buyers ability to regroup you.

II) There is a rule in the regroup process that states the following: If a person buys two or more parcels at one time, those parcels will be on one contract. A regroup buyer may not break-up a contract; he must take it all.

Look at figure 1. You, as the high bidder, took parcels #2 & #3 in one round. Therefore, no one could regroup parcel #3 & #4 without adding #2.

If you had purchased parcel #2 in one round and then purchased Parcel #3 in another, those parcels would be on separate contracts and may be regrouped separately.

What if I'm a Real Estate Broker?
We offer a Broker Participation Commission to any licensed Real Estate Broker who properly registers a client. Registration forms must be completed at least 24 hours prior to the scheduled auction by calling 877-421-SOLD to request a Broker Participation Form. The amount of the commission shared varies by auction.

I've never been to an auction before. This sounds confusing?
First, you are not alone most people who attend one of our Real Estate Auctions are there for the first time. Second, you will never be tricked into buying something that you don't want. The most important thing to do at an auction is relax and have fun. If you have a question, ask it. We strive to insure that all of our customers are fully informed and educated.

and remember, You're only going to pay one bid
more than someone else was willing to pay.

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