How do real estate auctions handle deposits and closing deadlines?

Real estate auctions usually require the winning bidder to sign a purchase contract and pay an earnest money deposit on auction day. The deposit is often a set amount or a percentage of the price, and it is typically nonrefundable if the buyer fails to close.

Closing is commonly scheduled within a few weeks of the sale. Many auction properties are sold without financing contingencies, so buyers should arrange their financing or cash in advance rather than counting on approval after they win.

Terms vary by company and state, so read the bidder information packet closely. It will spell out the deposit, closing timeline, buyer's premium, title arrangements, and what happens if a buyer does not perform. If anything is unclear, have a real estate attorney review the terms before you bid.