*DISCLAIMER NOTE* At Auction, Inc. (t/a “For Sale At Auction”) is an auction marketing firm, duly licensed and bonded in the Commonwealth of Virginia. We are not a law firm or attorneys, do not represent ourselves as such, and do not supply legal advice. We are providing the below responses to our frequently asked questions solely as a convenience to interested prospective bidders. Any reliance upon the information given is solely at your own risk. Any questions of a legal nature should be directed to your personal attorney.
I’ve never been to a real estate auction. What are your auctions like? How do they work?
Real estate auctions can be a lot of fun, but can also be intimidating to inexperienced bidders, such as yourself. We do our best to make sure everyone is comfortable participating in our auctions. Things are a bit different with a live auctioneer vs. an online-only auction, but the concept is the same, and quite simple. If you want to bid on the property being offered, simply raise your bidder card (or click the next bid advance button when bidding in an online auction). When someone outbids you, just keep raising your bidder card, or click the next bid button, and bid up to the maximum you are willing to pay. If you end up being the last person to bid, then you are the successful high bidder on that property.
How do I qualify as a bidder at the auction, and what does it cost to register?
To qualify as a bidder for our auctions, you may not owe delinquent taxes to the local taxing jurisdiction where the auction is being held, and you may not be a Defendant in any delinquent tax matter. The other qualification requirements are simple… a state issued driver’s license or I.D., or a Military I.D. with a verifiable home address. If Internet bidding is permitted, there may be other requirements to qualify for bidding online. On rare occasions, for extraordinary &/or very valuable properties, you may be required to present proof of certified funds in order to register for the auction. This would always be stated in the Terms of Sale for that auction. There is NO FEE to register and participate in the auction. All auctions are open to anyone in the general public that meets the stated qualifications for registration.
Is there a starting or minimum bid on this property?
In short, there are no “minimum bids” on the greater majority of tax delinquent properties. In a Judicial Sale of Real Estate, all sales are required to be presented to, and confirmed by, the local Circuit Court. The Special Commissioner of sale will report to the Court on the bidding on each property (attendance at the sale, and if spirited, competitive bidding occurred), the appraised &/or assessed values of the property; the outstanding taxes due; and the high bid amount received for the property at the auction. Typically, bids should bear some relation to the value of the property (For example: A property assessed at $25,000.00, that receives a high bid of $2,000.00, is usually not going to be approved by the Court). In the event the bid amount is unreasonable in relation to the approximate value of the property (substantially below the stated value), the Special Commissioner may elect to outright reject the bid, or recommend to the Court that the sale be rejected. Additionally, the Court, on its own, may decide not to approve the sale, and then direct the property to be resold.
How does the bidding process work?
Once again, this is dependent upon the type of auction being conducted. In a live auction, the auctioneer will typically start calling for bids around the assessed or appraised value of the property, then will decrease the asking bid until someone raises their hand, or bidder card, to start the bidding. Once the starting bid is “set in”, the bidding will increase from that point until the highest bid is determined and the successful bidder declared. In an online auction, at the discretion of the Special Commissioner, a minimum, or “starting” bid amount may be stated. As soon as someone bids that amount, the bidding increases until the close of the online auction and the high bidder is determined. Please see our “Online Auction FAQ’s” for specific details pertaining to the online auction bidding process.
Is online bidding permitted?
Oftentimes, yes! It is dependent upon the local jurisdiction, the request of the Special Commissioner (as to the type of auction they would like to conduct), and the physical location of the auction. Our auctions can take one of several different forms. It can be strictly live (no online bidding - you must attend in-person in order to bid); strictly online (ONLY online bidding will be permitted); or “virtual live/online” (Where the auction is being held “live”, with video and audio so you can hear/see the auctioneer, and all bidders can watch and bid real-time, online). If any interested bidders are unable to participate in an online auction, we will likely be able to accommodate your needs. Just give us a call to discuss your options.
Can I still bid if I cannot physically attend a live auction? Is proxy bidding permitted?
You may be able to submit your bids, even if you are unable to attend the auction in person. Absentee or telephone bids are usually possible for us to accommodate. Please contact us to discuss your specific needs. We want everyone to have the opportunity to participate in our auctions. In such cases, your bid must be accompanied by the appropriate deposit, as set by the terms of the auction, and a copy of your required I.D. You can also have someone (a friend, family member, or business associate) appear at the auction to bid on your behalf, or bid online for you. In a live auction, they will need to register themselves and bid in their own name. If they are the successful bidder they can direct the Special Commissioner that the title to the property will be taken in your name. Allowing someone to bid in an online-only auction, using your sign in credentials, etc., is solely at your own risk. You are responsible for all actions taken online under your username and password.
I want to purchase a property before it goes to auction. What do I need to do?
Unfortunately, this isn’t possible, or legal, in the Commonwealth of Virginia. There are states in the country that allow this type of sale (known as a “Tax Lien Sale”), but Tax Lien Sales are not permitted in Virginia. Virginia gives EVERYONE the chance to purchase tax delinquent real estate in a public auction forum (It’s truly the fairest process for the owner of record). If you’d like to sign up for email notifications for our real estate auctions, Please Click HERE. We’ll be sure you never miss an auction!
What is the Buyer’s Premium?
The Buyer’s Premium is a percentage of the high bid amount that is charged to the successful bidder to offset the costs of sale. The premium charged is usually 10% of the high bid amount. For example: If you bid $10,000.00 on a property, the Buyer’s Premium will be $1,000.00, for a total sales price of $11,000.00. Always keep this additional premium in mind as you’re bidding on each property.
Are the taxes wiped out when a property is sold, or will I have to pay the back taxes?
Upon the sale of the property, all back taxes, penalties, interest, and fees are wiped clean and taxation of the property starts fresh with the new Purchaser. The start date for taxation of the new owner varies by locality. It can start “as of the date of the auction”, or as of a specified date announced at the auction.
If I purchase a property with an existing mortgage, judgement, past due HOA fees, I.R.S. or other liens filed against it; am I then responsible for paying those debts?
No. Through the delinquent tax sale process, all lien holders are notified of the legal process underway to sell the property for delinquent real estate taxes. They are all given the opportunity to protect any interests they may have in the property. Virginia law permits the property to be transferred free and clear of any liens or encumbrances, which includes all liens and delinquent taxes, penalties, interest, and fees upon confirmation of the sale by the Circuit Court.
What does it mean when you say “Confirmation of Sale”?
Following every Judicial Sale of Real Estate (generally 3-6 weeks following the auction, but varying by each locality’s court schedule/load), a Confirmation of Sale Hearing is held in the local Circuit Court. Here the results of the auction are presented to the Circuit Court Judge, along with the recommendations of the Court Appointed Special Commissioner. At this hearing, the Judge will approve, or deny, the sale of each property. If you are the high bidder, you may attend the Confirmation of Sale Hearing if you like, but it is not required that you do so. The Special Commissioner will notify you of the results.
What happens when a property doesn’t sell at the auction, or the sale isn’t approved by the Court? Can I purchase it outright from the locality at a discount?
It is rare for us to have “No Sale” properties at auction. Over 90% of our sales end up being approved by the Court. However, when it does happen, any property that does not sell at auction the first time will be offered for sale at the next scheduled auction (typically in 6 months to a year). Properties cannot be offered for sale privately, as the locality is not the owner of the property. Sales must be handled through the Court Appointed Special Commissioner and the auction process.
What happens to my deposit if the Court doesn’t approve the sale of a property on which I was the high bidder?
The Special Commissioner will refund 100% of your deposit.
How much are the back taxes on this property?
Not to be rude but, we DO NOT KNOW! And, it’s also not pertinent to the auction sale process. The Special Commissioner has all of that information, but the auction company doesn’t need it. We are sometimes selling properties that are 10-20 years behind in taxes (though the typical case is 3-7 years in arrears). They are not only behind in annual taxes, but are also behind in penalties, interest, and collection fees on top of those taxes. It is not unusual for us to have properties further in arrears on taxes and fees than the property is worth. While some localities may consider the amounts owed on a property when it is sold, most are anxious to see the property bring a “fair price” and have it in the hands of a new owner that will pay their taxes. In other words, the amount of back taxes usually has NOTHING to do with what the property has to bring at the auction in order to be sold.
I’m interested in a property with a house on it. Can you show me the inside of the house?
Unfortunately, no. Virginia law does not allow the inspection of improved properties being sold for tax delinquency. We cannot, and do not, grant permission to go upon improved properties for the purpose of making an inspection. Basically, when you bid on an improved property, you’re doing so with some level of “blindness” as to the overall condition of the improvements. This is definitely a “Buyer Beware” and “bid accordingly” situation. As an auctioneer that has sold hundreds of such properties, my recommendation is to bid on the property as if you’ll have to renovate all rooms and replace all systems. Then, anything you don’t have to do after you buy it is a “bonus”!
What happens when an improved property is occupied? Am I responsible for evicting the occupants?
Yes. It is the responsibility of the new owner (ONCE YOUR DEED HAS BEEN RECORDED - NOT Before) to evict any occupants of the property and remove any remaining personal possessions in/on the property. We recommend consulting with an attorney regarding your rights and responsibilities regarding the eviction process.
What if I buy an improved property and the occupants ransack, or severely damage the property before final settlement?
Because each property is sold strictly “As-Is”, and without warranties or guarantees of any kind, this situation would not release you from your obligation to purchase the property. However, as the “contract owner” with a signed contract (Memorandum of Sale), you likely have an “insurable interest” in the property. We encourage you to contact your insurance agent immediately to insure your interest in any improved property.
The property I’m interested in has a mobile home on it. Does that become mine when I buy the property?
No. Mobile homes (house trailers) are NOT improvements to a property UNLESS they are fixed to the property with a permanent foundation (concrete, cinder block, brick, etc.), and are listed as an improvement on the tax records. Mobile homes, travel trailers, and other titled items are “Personal Property” and are taxed as such. They are not part of the sale of the real estate. That said, for personal property that’s “abandoned” by the owner, and remains on your property, there is a legal process for you to gain ownership. Consult your attorney for assistance with abandoned property seizures.
Does the property perk or have a current septic permit?
We don’t know. This is a part of you doing your “Due Diligence” researching properties prior to bidding on them. Sometimes, a visit to the locality’s Health Department will uncover a current, or past, septic permit. Oftentimes, nothing is on file, so there are no known prior perk testing or results available. As an interested bidder, you ARE authorized to go upon UNIMPROVED properties for the purpose of making an inspection. This would include perk testing, surveying, etc. The cost of any such testing, surveying, title searches, etc., is solely your responsibility. You will not be reimbursed for these expenses by anyone.
Where can I find the physical addresses for properties being sold?
It varies by locality but, more often than not, unimproved properties are not assigned a physical address in the public records. In these cases, most localities have a public, online Geographic Information System (GIS) that allows real estate properties to be looked up online. We (the Auction Firm) typically post a copy of the GIS map on our website along with other pertinent information on each property in the auction. When possible, we make note of the nearest property with a physical address and post that in our property descriptions (for example: “Property is located approximately 500 feet North of 123 Main Street on the opposite side of the road”, etc.). *NOTE* The GIS is NOT an official survey of the property! The lines depicted are created using satellite images along with the locality’s best efforts to show the location and layout of the parcel. Interested parties/bidders should not rely on this information as an exact representation of the location, size, or shape of the parcel, and are encouraged to do their Due Diligence research prior to bidding.
What is the difference between a Special Commissioner’s Sale (Judicial Sale) and a Non-Judicial Sale of Real Estate?
A Special Commissioner’s Sale (Judicial Sale of Real Estate) is handled under the order, direction, and approval of the local Circuit Court. The Court ensures that all parties with an interest in the property are properly notified before the Court authorizes the sale of each property. The Special Commissioner’s Sale will transfer the property free and clear of all liens; including all past due taxes, penalties, fees, & interest. After each auction is completed, a confirmation hearing is scheduled where each sale must be confirmed by the Court before a deed can be issued to the high bidder/purchaser. A Non-Judicial Sale of Real Estate is conducted without court oversight and is limited to certain, usually non-buildable, parcels of real estate. These sales can be approved by the Special Commissioner &/or Treasurer on the day of the auction. The property is conveyed by Special Warranty Deed. The terms and conditions of a Non-Judicial tax sale are slightly different from a Special Commissioner’s (Judicial) Sale, with all funds typically required to be paid, in full, on the day of sale. Please review the Terms of Sale for EVERY auction in which you wish to participate. Terms vary by type of auction, and with different Court-Appointed Special Commissioners.
Is payment in full required on the day of the auction? If not, what is expected to be paid at that time?
For Judicial Sales of Real Estate, payment in full is usually NOT required. A partial down payment is collected. Non-Judicial Sales of Real Estate typically DO require payment in full on the day of the auction. Terms of sale always vary by the type of auction being held (Judicial Sale; Non-Judicial Sale; Live &/or Online Auction), the locality’s requirements, and by Special Commissioner. Always review the advertised Terms of Sale posted on our website for every auction, as they do change each time. Generally, the Terms of Sale require payment as follows:
A 10-25% down payment on the day of the auction with the balance due within 15 days following court confirmation. Sometimes there is a minimum of $1,000.00 to $2,000.00 (or payment in full if the selling price is < $1,000.00 to $2,000.00). Some Special Commissioners, but not all, limit their deposit to a maximum of $20,000.00 per property. Others have no maximum limit.
A buyer’s premium (typically 10% of the high bid amount) is added to the final high bid and becomes a part of the total sales price. Depending upon the Special Commissioner’s requirements, the Buyer’s Premium may be due in full, in addition to the above downpayment percentage, on the day of the auction. Other times, it is considered a part of the total sales price and the downpayment percentage will apply to the total sales price (which includes the Buyer’s Premium).