06/05/2026
GOING, GOING, GONE! All About Auctions
A property is going to be sold at auction what does that mean?
There are different types of Property Auctions
FORECLOSURE AUCTIONS. Properties are repossessed by lenders due to unpaid mortgages. The timeframe for the foreclosure is a lengthy process. In Idaho, most residential foreclosures are non-judicial trustee sales. The auction location is specified in the Notice of Trustee's Sale and is often held at a public place in the county where the property is located. On the auction date, the trustee conducting the sale reads the legal information. Bidders compete by raising bids. The highest bidder wins.
Payment Requirements
Unlike a traditional home purchase: The winning bidder must pay immediately. Cash, cashier's checks, or certified funds are often required. If no one bids higher than the amount owed to the lender, the lender takes ownership. The property becomes REO (Real Estate Owned) or a "bank-owned" property. The lender may later list it with a Realtor and become available on the MLS.
Important Risks to Buyer
Cannot inspect the property beforehand, Purchase the property "as-is."
May inherit certain liens if they haven't done proper title research.
May need to deal with occupants after the sale.
The purchaser pays according to the auction terms and receives a Trustee's Deed after the sale is completed. Only warrants that the foreclosure process was legally followed.
TAX DEED/TAX LIEN AUCTIONS. Properties sold because property taxes were not paid. In Idaho it takes a minimum of 3 years plus a few months of required notices before a tax deed is issued. The county follows state procedures and waiting periods, the property is auctioned to the highest bidder. Prospective Buyers may not be able to inspect property or even look at interior. The winning bidder receives ownership rights, usually through a tax deed. A tax deed does not guarantee clear title, or freedom from defects, boundary issues, easements or ownership disputes.
PRIVATE SELLER AUCTIONS. Homeowners voluntarily choose to auction their property. Seller sets the rules with the help of the auction company that they hire. They can set a Reserve, which is a minimum price, or Absolute, a sale to the highest bidder with no minimum. Auction companies use MLS exposure, advertising, social media, professional photos and work to get the best price for the property. This is a much safer type of auction for the Buyer as they can preview the property and even have a property inspection before the date of the sale. Full Seller disclosures are required.
5% is added to the final bid price and is paid by the Purchaser upfront as a non-refundable earnest money. There may be a sizeable amount due the day of the sale, but may have 30 days to put financing in place for balance of purchase price, no inspections, no contingencies. The sale closing is very much like a traditional sale with a warranty deed and a title insurance policy.
ESTATE AUCTIONS are used to settle estates. Usually held when the owner has died and the heirs, executor, or personal representative need to sell some or all of the estate's assets, and may require Court approval of the offer.
To the Buyer, the Estate Auction and Private Seller Auction are very similar, however the process differs in the legal framework behind the sale.
Often, Foreclosure Properties and Tax Deed Properties never make it to auction as they are settled prior to the auction date by sale or satisfaction of amount due. So if you are interested in a property that is available at auction, talk to your Realtor (preferably us) to learn what kind of auction it is and be prepared.
