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Chapter 9 [Sellers]
Auction Process
You can count on people to behave in their
own best interest. No one will let someone else walk away with a
bargain they want for themselves. Each serious buyer wants to
buy the property at the lowest possible price. This
process will continue until the price gets to the reasonable range.
Then the bargain hunters start dropping out, leaving the real buyers
to bid up the price against each other.
End of
auction
The following procedure is to be administered
at the closing of the auction. Your agent will contact the highest bidder
to discuss and execute legal documents. Only after a contract is
signed by both parties (buyers and sellers), IS A BINDING BID
CREATED. If the highest bidder is unwilling (the buyer has no
obligation to sign the contract) or unable to do the aforementioned
within 24 hours (COOLING PERIOD), you may choose to contact any of
the previous bidders.
Deal only with
preapproved buyers
Most people cannot buy a real estate property
with cash. They must go to a financial institution and borrow the
money. The financial institution will check to establish the buyer’s
ability to repay the loan. The mortgage approval may take from days
to months. This is why you want to deal only with preapproved
buyers.
A preapproved buyer is the one who already
started the mortgage process. He/she has actually submitted all
required documents and filled out forms for a loan and received a
preapproval in writing. The document shows how much the buyer is
qualified to borrow, what the interest will be and for how long the
financial institution will hold the cap on the interest (it is
usually 60-120 days). If the high bidder is not preapproved, offer
the property to the second highest bidder.
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