Auction FAQs
Thinking about buying or selling property at auction in Tennessee? Here are the most common questions people ask — with clear, straightforward answers.
Q: What is a real estate auction?
A real estate auction is a public sale where property is sold to the highest bidder under specific terms. In Tennessee, licensed auctioneers must conduct the sale, and most properties are sold “as-is, where-is.”
Q: Why choose an auction instead of listing on the MLS?
Auctions are faster, more certain, and competitive. Sellers set the date, buyers compete in real time, and closing typically happens in 30 days or less.
Q: What’s the difference between an absolute and a reserve auction?
Absolute Auction: The property sells to the highest bidder, no matter the price.
Reserve Auction: The seller sets a minimum acceptable price. If bids don’t reach it, the seller can choose not to sell.
Q: What is a buyer’s premium?
A buyer’s premium is an additional fee (commonly 10%) added to the winning bid. Example: if the high bid is $200,000, the total purchase price is $220,000. This fee is paid by the buyer, not the seller.
Q:How much money do I need on auction day?
Most auctions require a 10% non-refundable deposit paid immediately after the auction, plus proof of funds for the balance due within 30 days.
Q: Can I use financing to buy at auction?
Yes, but you must already be pre-approved and able to close in 30 days. If your loan fails, you risk losing your deposit. Many buyers choose cash, bridge loans, or hard money for speed.
Q:What due diligence can I do before bidding?
All inspections, title checks, and zoning research must be done before auction day. Auctions are almost always “as-is,” so buyers should complete due diligence in advance.
Q:Who pays the auctioneer’s commission?
It depends on the auction terms. In most Tennessee auctions, the buyer pays through the buyer’s premium. Some auctions use a flat seller-paid commission instead.
Q:What happens if the property doesn’t sell?
If the reserve price isn’t met, the seller may choose not to sell. In that case, the property can be marketed again or listed later. Marketing fees are usually still due.
Q:How fast do I get possession after an auction?
Possession usually transfers at closing, within about 30 days. Buyers receive the property once the deed is recorded and funds are cleared.
Q: Should I sell my Tennessee farm through a traditional listing or a public auction?
The choice depends on your timeline and property type. A traditional real estate listing offers more privacy and flexibility for buyers needing bank financing. However, a Tennessee land auction creates immediate competition and is often the best method for multi-parcel estates, high-demand farmland, and agricultural property where you want a certain sale date and no contingencies
Q: What is the Tennessee Greenbelt Act and how does it affect property taxes?
A: The Tennessee Greenbelt Actallows qualifying agricultural, forest, or open-space land to be taxed based on its current use rather than its potential development value. To qualify, land usually requires a minimum of 15 acres. This can significantly lower annual property taxes for Tennessee landowners and is a critical factor when valuing large acreage or family farms.
Q: How do I sell inherited land or an estate in Middle Tennessee?
A: Selling inherited land requires a clear chain of title and an understanding of Tennessee probate laws. Working with a Realtor® and Auctioneer who specializes in estates ensures the property is marketed correctly to both traditional buyers and investors. We recommend a professional land survey and a soil percolation (perc) test early in the process to maximize the land's market value.
Q: What is a "Buyer’s Premium" in a Tennessee real estate auction?
A: A Buyer’s Premium is a common fee (typically 10%) added to the high bid at an auction to determine the final contract price. In Tennessee auctions, this fee often covers the cost of marketing and professional services, allowing the seller to retain a higher percentage of the "hammer price."
Want to Learn More?
This page covers the basics, but each auction is unique. We’ll be publishing detailed blog posts on each of these FAQs so buyers and sellers in Tennessee know exactly what to expect.
Contact Jennifer Davis today to learn more about buying or selling at auction in Middle Tennessee.