Lawyer needed for REDC/Auction.com purchase?

Question

Hello,

I was the high bid on a property on auction.com.
My question is  it necessary to get my real estate atty to look over the contract?
I have not seem the contract yet but I would assume it is a standard contract buying a property "as is" with no recourse  etc. 
All that is fine and understood.

I would like to save a few $$ on atty fees if I can but I certainly do not want to be stupid.

Anyone have any experience with their contracts?

Thanks for your help.

Carlos N. · Answer

The question was do you need a lawyer to purchase a property from auction.com. It was not about the reserve. Anyone have any advise on the lawyer? Thank you in advance.

J Scott · Answer

It's written very clearly in the Seller Addendum that you sign...

Nitin Verma · Answer

They also have a $100 per day clause (Which is not written anywhere) if you want to move your closing date.

Michelle Lenahan · Answer

I actually worked for a title company that handled some of the files so I got to work behind the scenes at one of the REO auctions.  If the reserve set by the bank has not been reached they will disclose that to you when you go back to sign your paperwork.  You can then walk away or you can sign the disclosures and give your deposit and wait for the bank to present you with a counter offer. If you walk away at that time then the property will come back up for auction the same day. This is also why many of the properties that show sold at the auction will come back on the market a few weeks later.
ALERT: Another issue that is very confusing to folks right now is that Auction.com has entered the world of Trustee Sales.  Up until recently the properties on the auction.com site were all REO properties being sold through an auction format (they already went to trustee sale and are bank owned).  NOW Auction.com is actually holding trustee sales which is an ENTIRELY different auction with VERY different rules. You are welcome to contact me if you need more information.

Mark H. · Answer

I bought one through Auction.com a couple of months ago  - hopefully, you read the terms & conditions fully - you don't get an inspection period, nor do they give you a financing contingency - if you can't close the deal for the high bid, your deposit is gone.  An attorney is going to tell you that it's a one-sided contract...  not a surprise.

That said, if you got the bid right, & didn't pay too much, the company itself was decent to deal with - the escrow company for my deal was out of state, so there was a little hassle there, but I was able to "e-sign" the contract, which was convenient.

Rusty Thompson · Answer

I agree with Joel... especially where auction.com is concerned. That website provides every advantage to the seller & removes almost every advantage to the buyer. I don't even bother looking at that website any more. I'm not saying u can't buy a house @ auction for a good price. I recently purchased a property from a williams & williams auction and got a very good deal. But they are few and far between & if its to good of a deal... the seller will just not go throug with the sale. I have seen it happen.
I would def. Recomend off market & rehab properties before any auction site.
As far as a lawyer is concerned. I wouldn't bother. My contract was standard & very straight forward. As most real estate contracts are. Unless your buying something one off, or Really Expensive a attorney is often a waste of time. One thing I will warn you about is the close ia very short. Most likely 30days. You will really have to be on the ball to make his happen. Closing the deal will be your life for the next month. Get started before you even get the contract. Contact the selling real estate agent. Get the financing lined up. Make sure to cross all t and dot all i's... otherwise u may end up sorely regretting this purchase.

Joel Owens · Answer

Depends on the terms of the auction for the property you bid on.

Whether it was an absolute auction or not.If there was no reserve minimum then you bought it.Most of the time there is a reserve and even if you have the winning bid the seller still has to approve or can decline or come back with a counter.

Many times buyers think they have stolen the property for a great price and the sellers think they were going to pull one over on a dumb buyer.

The less competition you have for a property typically the lower price you can get.This is why off market deals are sought after for acquisition versus many newby investors who will bid at auction and overpay for a property.

Scott Hubbard · Answer

Actually, you have entered into a legal binding agreement.  You have agreed to purchase at a set price and have consideration on deposit.  I bet you did have to sign a statement of intent after you placed the winning bid. Your agreement, however, is with the auction service, not the seller.

Just has Chris has said, the seller has first right of refusal and since it takes at least two principals (a seller and a buyer) to enter into a transactional agreement, you do not yet have a contract.

In my opinion, it is premature to get an attorney involved because you do not want to spend a dime until you have an executed purchase agreement.

Chris Martin · Answer

I've heard that having the high bid doesn't mean that they will actually honor the sale. Given that you say "I have not seem the contract yet..." you obviously haven't signed anything. Only get an attorney involved if there is a contract. Until then, this auction exercise is just for entertainment.