If you’re new to auctions, on the buying OR selling side, you’ll probably run into some jargon you might not be familiar with. The Dempsey Crew is here to help! Here are a few terms and phrases that you’ll see us and other auction houses use.
10% Buyer’s Premium
This is a commission that is paid to the auction company. If you are the highest bidder on an item with a 10% buyer’s premium, that means you owe the bid price plus 10%. Here at Dempsey Auction Company, this covers the work we do to get the best properties in front of you.
So, what does the buyer get with the buyer’s premium? The buyer receives the most professional service from the time they first contact Dempsey to when they close on the property. That includes gathering information on the property, assistance at the auction, and providing peace of mind that their real estate transaction is going to go smoothly thanks to our 55+ years of experience.
We love a multi-parcel auction for our buyers AND sellers. Separating large properties into smaller tracts OR bringing in multiple sellers and properties into one auction means that attendees can bid on individual properties or any desired combination. This means buyers can have an even more exciting auction, and sellers can potentially profit even more than a standard auction. Furthermore, one of the biggest reasons people want to sell in a multi-parcel auction is to split the cost of the auction between multiple sellers rather than one party taking the bulk of the costs. It’s a Win-Win-Win!
Owner Confirmation vs. Absolute Auction
This is all about your final bid. In auctions with owner confirmation, the seller reserves the right to accept or reject the final bid. In absolute auctions, the property will sell to the highest bidder, no matter the price!
You might be wondering: what is better? The short answer: it varies from property to property. Here at Dempsey Auction Company, we believe that time is everyone’s most valuable asset. If a buyer sees that a property is being marketed absolute, then they know at the end of sale day if they offer the most amount of money, they are going to win the property. That means they will spend more of their time doing their due diligence and prepping for the auction, whereas if it is not absolute then if the buyer does all of their homework and offers the most amount of money, they still might not end up with the property.
From a seller’s perspective, we believe that advertising absolute will get more buyers under the tent on sale day. However, by law, if you advertise absolute, you must sell. So, sellers lose the ability to control the situation. A positive in having an owner confirmation auction for the seller is that at the end of the day, they still have control over whether the property sells or not, and can hold out for a better offer down the road.
If you’re unsure about your options, we are here to help you make the best decision possible for your sale.
Sales Plat vs. Survey vs. Tax Map
When you’re prepping your property for auction, these are terms you’ll see. A sales plat can refer to a survey OR a tax map. We use sales plats to show what we’re selling at a Dempsey Auction.
A survey means a surveyor will come and get exact property lines. A tax map is simply whatever a city or county has on hand in its records. Generally speaking, it’s less specific and detailed than a full survey.
This choice is one Dempsey Auction makes depending on if the property warrants a survey. If we choose to have the property surveyed, the buyer pays for and is granted the survey on sale day with their down payment and knows they’re getting the gold standard in what land is included in their purchase!
Bid Price vs. Sales Price
Say you’re one of our buyers at an auction. Numbers climb, people are excited, and you end up bidding $100,000 and hear, “Going…going…SOLD!”. Your final bid of $100k is the bid price. However, the sales price includes the buyer’s premium. In our case, it’s often 10%.
If you still have questions about how selling at an auction works or anything related to the industry, the Dempsey Crew is here. Just let us know how we can help!