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REGISTER:
The first step in buying property at a VHA online home auction is registration. Registration is free, quick, easy, and there is no obligation to bid on or buy any property. Registration allows buyers to receive notices of additions and deletions to the auction, as well as the ability to track properties that they are interested in. Credit card information is not required until the buyer decides to place a bid on a property.
REVIEW PROPERTIES/OPEN HOUSE:
After registration and accounts are created, buyers can review available properties through HOUSE HOUND on the VHA website. Each listing has information, pictures, and other disclosures. Once a buyer has identified properties of interest, they need to review the property's information and disclosure documents in order to make an informed decision. Buyers should visit any properties of interest on the open house dates provided on the property details page. During a visit, please make a complete and thorough inspection of the property. Some buyers may choose to bring a home inspection professional to help with inspection.
It is important that a buyer does their homework prior to a home visit and prepares a list of what to look for during an open house. Depending on the buyer's motivations for buying the home, they may choose to bring a contractor to discuss building or renovations. Regardless of a buyer's plans, a thorough home inspection is never a bad idea. When a buyer places a bid on a property they are essentially stating that they have viewed and inspected the property, and accept the condition and nature of the property. Once an auction has ended properties are no longer open for inspection, so it is wise to conduct all inspections prior to bidding at auction.
REVIEW PURCHASE CONTRACTS/TERMS AND CONDITIONS:
When a buyer places a bid at a VHA online home auction, they are accepting and agreeing to the auction terms and conditions. The terms and conditions of auctions held through VHA are available on the website, and it is encouraged that buyers review this documentation prior to involving themselves in an online home auction. If a buyer becomes the winning bidder on a property, they are also required to sign a purchase contract during the closing process. The Purchase contract is also available on the VHA website, and it is strongly advised that this document be reviewed before auction involvement. Furthermore, there may be additional terms and conditions on a particular property which is available for review under the "property details" portion of a property listing. Again, bidding on any property constitutes acceptance of all terms and conditions, so please review all documentation thoroughly.
BIDDING:
When a buyer is ready to bid on property, a security deposit in the form of a credit card authorization is required. This is only an authorization charge and will be removed within 24 hours if a buyer is not the winning bidder of an auction. If the buyer is the winning bidder, the deposit is removed upon receipt of the earnest money deposit. The amount of the credit card deposit is based on the bidding limit that a buyer has set for themselves. This amount will vary from $2,500 to $15,000.
To place a bid, buyers will click the "Bid Now" button next to the property that they are interested in purchasing. Buyers are then asked to confirm the bid amount so that the bid may officially be entered.
An email confirmation of the bid is then sent to the buyer's registered email address.
Buyers also have the option of bidding by proxy. Proxy bidding is a safe way to bid when a buyer knows that they will not be around a computer. A proxy bid is essentially automated bidding up to a maximum amount as set by the buyer. For example, assume the current bid is $105,000 and the minimum bid increment is $5,000. If a buyer places a proxy bid of $120,000, the computer would initially take the next minimum bid increment and put in a $110,000 bid. If the buyer is the current highest bidder, the computer will not bid again on their behalf; however, if another buyer then bids $115,000, the computer will put in a bid of $120,000 as the latest proxy bid. If another buyer then bids $125,000, the computer will not bid again as the specified proxy bid limit has been reached.
A 5% buyer's premium is added to the winning bid as part of the final purchase price. For example, if a buyer wins an auction at $100,000, after a 5% buyer's premium the total purchase price will be $105,000. Buyers should take this amount into account when determining how much they are willing to bid. The buyer's premium is not a real estate commission; it is a fee that Value Home Auctions charges for selling a home through their online auction system. The buyer's premium is separate from any broker commissions and is used by VHA to promote auctions and cover auction expenses.
When an auction ends, HOUSE HOUND will indicate the property is "sold" or "sold subject to confirmation." Properties "sold subject to confirmation" are subject to an unpublished minimum selling price or "reserve price," which the winning bid did not reach. If bids do not meet the reserve price, the seller has the right to accept or reject them at the seller's discretion. The starting bid is not the same as the reserve price.
Finally, a winning bid is not a final sale of the property but acts only as an OFFER by the buyer to purchase the property from the seller. No property sales are final at auction until there is a mutually acceptable written purchase contract that has been executed by the property seller and the winning buyer.
ALL SALES AT THE AUCTION ARE "AS-IS" AND "WHERE-IS":
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Properties are "as-is" and "where-is" with no opportunities for further inspection. |
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The purchase contract provides no contingencies. |
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Buyers can review all available disclosures concerning an individual property on the property details page. |
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CLOSING:
The winning bidder will receive an email with the purchase contract, escrow/closing instructions, earnest money deposit forms and other necessary documentation. VHA will also contact winning buyers within 24 hours of the auction to help complete documents and determine the proper amount of the earnest money deposit. The Earnest Money Deposit is the amount of money that the winning bidder must deposit with the escrow/closing agent on auction day. This is not the down payment, but it may be applied toward the down payment. If a buyer purchases one property only, the earnest money deposit will consist of a wire equal to 5% of the total purchase price. For example, if the total purchase price is $200,000, the earnest money deposit will consist of a wire in the amount of $10,000, which is 5% of the total purchase price. If a buyer purchases more than one property, the earnest money deposit will consist of a wire equal to 15% of the total purchase price.
Finally, VHA requires that buyers complete forms and send in the earnest money deposit within 24 hours. Buyers must complete and return the documents within one business day, together with their Earnest Money Deposit by wire transfer into escrow. Failure to do so may result in their credit card being charged for the balance of the Earnest Money Deposit. Moreover, the sale will become null and void and the property will be subject to re-auction.
The Purchase Contract requires a 30-day closing timeframe which many outside lenders and cash purchasers cannot meet. If a buyer fails to close on time they could be subject to liquidated damages resulting in a forfeiture of their Earnest Money Deposit.
When escrow closes, buyers will receive a CLTA owner's policy of title insurance for the amount of the purchase price issued by a national title company showing the property to be free and clear of any financial liens other than future property taxes and bonds.
There has never been an easier way to buy properties. We look forward to your participation in our VHA online auction event!
AUCTION ASSISTANCE:
Value Home Auctions, Inc. is available to answer any questions about bidding or the auction process. Send questions to bids@valuehomeauctions.com or call customer service at (800) 974-2328.
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