Sunday, May 17, 2009

REDC Auction

REDC is one of the biggest home auction houses in the country and they’re advertising their upcoming June 13-14 Phoenix area auction heavily on local cable TV channels.

Here’s a few things you should know if you’re thinking about attending.

Access and Inspections

  • You can tour the homes and do inspections before the auction but not after

  • Open House dates for the Phoenix area are May 30, June 6 and June 7

  • Heather’s note: it’s nearly 100% certain that Realtors will be holding these open houses, fishing for unrepresented buyers, so be ready to say No or bring your own Realtor to the open house

  • It probably goes without saying that REDC probably won’t be happy if you do your home inspection during the Open House (but many homes are on Realtor's lockboxes so you can hire a Realtor to get you into the homes at time other than the Open House)

Attending The Auction

  • You have to bring $5,000 cash or cashier’s check to enter

  • You can bring your own Realtor to the auction and REDC will pay him/her a 1% commission

  • If you win a property at auction you must put down a 5% earnest money deposit that day

  • You cannot attend the auction for someone else (no assigning winning bids)

The Money

  • You can finance your home purchase

  • REDC’s lenders are on site but you don’t have to use them

  • If you use your own lender, you must purchase the home even if you’re turned down for a mortgage (no financing contingency)

  • You must close on the purchase within 30 days of the auction

  • Heather’s Note: Lenders a swamped with buyers lately so you might not be able to close within 30 days; start working with a lender before the auction

The Fine Print

  • REDC adds 5% to your winning bid to cover their marketing expenses (if you win a house for $200,000, they’ll add 5% - or $10,000 – to make total purchase price $210,000)

  • The 5% fee is added to your purchase price whether you use your own Realtor or not

  • REDC’s website says they usually auction 25 to 30 properties per hour (i.e. you’ll have 2 minutes, total, to decide whether you want to bid on each home, and how much

  • If you “win” the house at the auction your purchase is non-cancellable

If you want to read the complete FAQ for this auction you can find it on REDC's website. A few more thoughts on auctions tomorrow…

I’ll be attending the June 14 auction. If you’d like to attend with me, call or email.

602-999-8831 or