Wednesday, November 19, 2008

Auctions Part 5: What Agent Should I Hire?

The last critical post in our series about Real Estate Auctions is about hiring a buyers agent to assist you.
Unless you are extremely savvy and experienced, I suggest you seriously consider hiring a buyers agent. But, let's face it, unless you hire one with experience with auctions, you've done yourself a disservice.
Your agent's role is to:
~Help you do your homework before the sale:
  1. To find out the type of auction, and the details about the auction.
  2. To make sure you and your inspectors have access to the property to do a full assessment.
  3. To get a copy of the Purchase Agreement, make sure you understand it and coordinate you getting any legal advise that may be necessary.
  4. To coordinate the RIGHT financing, including facilitating any needed appraisals.
  5. To give you comps and educate you (and himself) on the market. To give you a price opinion.
  6. To find out if you can make an offer pre-auction, and if so, help you determine if that is in your best interest.
  7. Guide you in determining what offers you are, or are not, willing to make to win the property.
  8. To help you understand auction requirements (if you most pre-register, if it is live bid only, what deposit is required, etc.)

~Help you stay focused in the quick moving auction environment. It's easy to lose focus and get caught up in the emotion. Your agent will keep you focused and remind you of the commitments (price and terms) you made to yourself when you were thinking clearly.

~To coordinate the after contract process...including lending, appraisals, inspections, scheduling contractors (if needed), ordering title work, hiring the settlement agency, and coordinating any other related details, and to help you keep your head throughout the process.

While it doesn't sound too hard, you'd be surprised. As they say "the devil's in the details". One false move and you'll lose. Your agent should be your best friend, guiding you through the process and making it seem easy. If, at the end of the transaction you are thinking "wow, that was easy, why did I decide to pay for an agent? I could have done THAT myself", that means you hired a fabulous agent. And, the first chance you get, you should hire that agent again. Auctions are tricky.

Ask for recommendations. Hire an "auction specialist"- either someone who is a certified auction specialist (if you can find one), one who's been on both listing and buying sides of auctions, or one who's been an auctioneer AND a real estate agent (and be careful, because sometimes these agents are technically great, but they won't give you the personal comfort level and assurances you want moving through a major financial transaction).

Once you've decided who to hire, make sure you sign a buyer agency agreement so you know the terms of the agreement... how they will represent you, what you must pay, how and when, and what you can expect for that money. Then, check AGAIN on the day of the auction. Unlike traditional sales, not all auctioneers compensate the buyer's agent; and some only pay a portion of what a strong agent will require. Beware of agents charging below market fees - often, you get what you pay for. The right agent will also help you understand how, if at all, that might affect your loan.

Look for, and hire, the right agent; and be willing to compensate that agent fairly.


I am happy to provide a personal referral to a buyers agent in your area. I have contacts throughout the country. Just contact me directly...

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