Repossessed Property
For those investors interested in purchasing a repossessed property to add to their portfolio, one of the best means of acquisition is at an action for repossessed property. When you first arrive at the auction you are required to register as a bidder. Once this is done you then receive a number as well as a coordinating bidder's paddle which is only valid for the specific auction at which you are in attendance.
To register you should have with you proof of your residential address which can come in the form of a municipal account, your ID document, as well as means to pay the registration free.
This can be payable by cheque. The registration fee is refundable if you opt not to bid on a repossessed property or your bid turns out to be unsuccessful. If you are bidding on behalf of another person or on behalf of a legal entities (for example, a trust or close corporation) then you are still required to register and provide proof of your authority to bid on their behalf. At some auctions for repossessed property, you will then have to sign an undertaking which makes you responsible to see through with the entire purchase should your bid on someone else's behalf be selected as the winner.
The next step when bidding at auctions on repossessed property is the check to verify if any additions or any amendments had been made to the Conditions of Sale which you should have received and read over in advance. More than likely you will be asked to sign that you understand and acknowledge the terms of that contract. Any unaddressed questions should be addressed prior to the start of the bidding. You should then get a copy of the Order of Sale sheet. This information will provide you with the lot number for the repossessed property. When your lot arrives, you should be in a location where you are clearly visible for the auctioneer and you should be prepared to bid decisively and quickly.
Some auctions for repossessed property are conducted with a reserve price which functions as a minimum price agreed upon between the property sellers and the auctioneer. Others do not require a reserve price and are known as absolute auctions which give the property o the highest bidder. Most repossessed property is sold in this manner, as it is often sold following a judgment against an unpaid debt. If, however, there is a reserve price which is unmet by bidders, but your bid still remains the highest of all the bids, you will more than likely be contacted within a few days to accept the remaining bid.
In the end, if you have success with your bid you will immediately sign the Conditions of sale form which confirms that you are purchasing the repossessed property at that price prior to leaving the site of the auction.
The auctioneers commission and a deposit are required immediately include VAT, less the registration fee you paid upon entrance. The remaining balance is then due immediately upon transfer and until that time you are required to sign a guarantee to the seller's attorney that you will pay. Prior to leaving an auction for repossessed property, be sure to double check the risks in the property so that you are aware of any insurance needs and can protect yourself against financial loss.
