Real Estate And Seized Cars
Buying at Government Auctions II
The US Treasury Department auctions offer previews on the days prior to the actual auction date, also allowing you to register at the same time. Sometimes the previews in smaller auctions are limited to the day of the auction, which can be frustrating if you don’t get an item list in advance.
We highly recommend attending the previews whenever possible. This will give you a chance to inspect the items as well as any terms and conditions that may be applied to the items. For example, the Treasury auctions often have items that have been seized through customs and are for export only. This means that you have a limited time after winning the auctions to export them out of the United States.
Always read the item descriptions carefully, they contain valuable information, like information on encumbrances in the case of Real Estate. It doesn’t do you any good to win a house at auction for $35,000 only to find out it has a mortgage lien on it for $600,000, a debt which you must pay or surrender the property to the note-holder.
Attending the previews when they are held on a date in advance of the auction gives you time to research the values of the items you are intending to bid on. This is an important strategy to avoid over-bidding, which of course leads to over-paying. You did not become a bargain hunter only to pay above-market value for an item at auction just because you are bidding against someone who has no idea what the item is really worth. Don’t be that clueless person yourself.
On big-ticket items, large deposits will be required at the end of bidding if you are the winning bidder, so be prepared. Read the item bidding requirements carefully. It’s not uncommon for back up bids to be recorded, and if you fail to provide the deposit, you will forfeit the item and it will go to the next highest bidder. Many auctions require payment in full at the conclusion of the auction, so come prepared.
We do our best to provide phone numbers for individual government auctions whenever possible so you can call for information on these auctions. Don’t be afraid to call them if you have a question, that is what they are there for.
Wholesale Markets Versus Retail Markets. When you buy items at a government auction, your are buying items at a wholesale market and this is different from a retail buying experience, and it should not be confused with buying something at Walmart or any store that has liberal customer satisfaction policies.
In wholesale markets like government auctions, items are sold “as is where is,” which translates into “Don’t expect any help after the sale.” It also means no warranty on the items unless otherwise stated. It also means absolutely no returns unless otherwise stated. Buy a car at government auction, drive it home, and watch the transmission fall off. Whose problem is it now? Yours. So factor that in when forming your bidding strategies.
In a wholesale market like a government auction, you are trading off the higher priced customer friendly retail buying experience for an opportunity to buy at below market values. Again note we used the word, “opportunity,” which is not a guarantee that it will actually happen, so be careful when bidding.
