the money comes from the buyer

Summary: not every seller wants to use a real estate agent to sell their property, for many reasons as we all know. Auction companies utilize real estate agencies across Ontario.  The auction company retains a real estate brokerage and the seller is the client of the auctioneer and a limited extent the brokerage as well.  

Commissions are almost always fair market, where the Buyer’s agent can expect 2 to 2.5% on most auctions (this is part of the Auction Company’s total charge to the Buyer on top of the winning bid). 

What is the Listing Agency For? 

• Posting the property to MLS, 
• The posting brokerage will be a guaranteed commission amount agreed upon the realtor and the auctioneer, 
• For an exchange for the realtors work a much higher than normal posting fee is paid to the realtor.  

What is the Auction House Responsible For? 

• Answering questions from prospective buyers and their agents, 
• Collecting and reporting all bids, 
• Collecting deposits, keeping buyer records.  

1. What is a bid?  ANSWER: A bid is a signed agreement of purchase and sale, without conditions. It can also be known as a “Purchase of Sale Agreement” or an “Offer”.
   
2. How do I submit a bid?  ANSWER: You must sign a bid registration form in order to submit your bid to the auctioneers. You will sign a bid and submit it through email with your Realtor directly to the posting realtor and the auctioneer.
   
3. What is a soft close?  ANSWER: if in the event a bid is received during the last 24 hours of the auction close, then the auction will be extend for an additional 48 hours as a soft close.
   
4. What is a Buyers’ Premium?  ANSWER: This is the cost of running the auction which is charged to the buyer in a addition to their bid amount. This is fee that is determined by the auction company.
   
5. Do I need a deposit? ANSWER: Yes, you still need to provide a deposit when your bid is accepted.
   
6. What is a reserve? ANSWER: This is the lowest amount the seller will take in order to close the auction.
   
7. Do I need a Realtor when bidding? ANSWER: Yes, the auctioneers advise you to be represented by a Realtor to help you through the processes. If in the event you do not have a realtor then the posting realtor can provide a buyer customer service to complete the processes.
   
8. How do I know I’m the only offer? (Or how do I know how many offers I’m competing against?) ANSWER: The auction company’s website will have the number of registered bids online for everyone to see.
   
9. What are my next steps after my bid is accepted? ANSWER: You will submit your non-refundable deposit to the auctioneer in trust.
   
10. What do I need to provide my financial institution after my bid is accepted? ANSWER: Your lender will need a copy of the Agreement of Purchase and Sales and the MLS listing. Please consult with your financial lender to confirm all the documentation that they will require.  
    
11. Where does my “Buyers Premium” go? ANSWER: Your buyer's premium goes to the auction company. From the buyer’s premium the auction company disperses funds to your realtor and any other parties involved in the auction process.  
    
12. What do the auctioneers do with my bid after it's accepted?  ANSWER: the auctioneer keeps a record of your bid for the time required by law. Once that time period has expired your bid will be destroyed. If you are the winning bidder the seller will counter sign your bid and copies will be distributed to you, the seller, the posting realtor, the auctioneer, and both attorneys involved in the closing of the transaction.   
    
13. What Cash do I need upfront? ANSWER: You will need the deposit and your Buyer's Premium.  
    
14. What Cash do I need on Closing? ANSWER: You will need your down payment and any remaining buyer's premium that is due.
    
15. Who holds my deposit after acceptance? ANSWER: The auction company holds all deposits in trust until the completion of the transaction.
    
16. Does my bank still need to appraise the property?  ANSWER: Your lender may require an appraisal. Some properties will have an appraisal report upfront. This requirement is dependent on your lender.  
    
17. Is there a different process to get financing when buying an auctioned property? ANSWER: Any financing which you may require before making a non-contingent bid should be made in advanced of submitting to the posting realtor and auctioneer. This is if you will require financing to proceed to with a non-contingent bid: in the alternative a down payment and all the necessary documents and approvals will apply.
    
18. Do Realtors get paid if they bring a buyer? ANSWER: Yes, the percentage amount will be advertised will be advertised on the realtor side of MLS.
    
19. Who pays the Realtors? ANSWER: The auction company is responsible for compensating the co-operating realtor per the MLS listing.
    
20. When do the Realtors get paid?  ANSWER: The Realtors get paid after the closing, once part of the processing fee is submitted.