How to Bid on Q1 Real Estate (What You MUST Know)
In order to Bid on a Property that you are interested in, you must submit the following Documentation to the Listing Agent:
- Bank Pre-Approval Letter
- Proof of (Liquid/Cash) Funds
After the above documentation is received, you (Buyer’s Real Estate Agent and/or Buyer) must
make an Appointment to personally see the Property (No “Blind Bids/Offers” will be considered).
Once you (Buyer’s Real Estate Agent and/or Buyer) have seen the Property, the Listing Agent will “Approve” you as a Bidder.
To Bid, enter a dollar value into the box (your bid) and click “Place Bid.”.
Things you should know Before Bidding:
Q1 Real Estate Auctions accept bids only for a specific amount of time. In a traditional non-Q1 Real Estate auction, bidders frantically place competing bids. When bidding slows to nothing, the auctioneer pounds the gavel and the item is sold. On Q1 Real Estate, auctions are open to bids for a specified amount of days and will end at specified time. Once the Bidding Time Period has ended, the Listing Agent will request that you (as the one of the Top Five Bidders – in terms of Dollar Amount Bid) Submit a Written Offer (Real Estate Purchase Agreement = R.P.A.) to the Seller’s Listing Agent. The Purchase Price in your Offer is equal to your Final Bid + Buyer’s Premium (Buyer’s Premium is set by the Listing Agent and may vary).
Example:
$100,000 Final Bid
+ $2,500 ***Buyer’s Premium 2.5% of Final Bid Amount
$102,500 Purchase Price for Written Offer (RPA)
NOTE: The Seller reserves the right to Accept, Counter or Reject any Bid.
***Buyer’s Premium includes .5% (half percent) Service Fee payable to Q1 Real Estate
You must place a bid that is higher than the current bid. Below the bidding box, you will see the text “Enter (some amount) or more.” This amount is the current minimum bid; you must enter at least this amount if you want to bid.
You may pay less than your bid if you Highest Bid. When you are the Top Bidder in the auction, you always actually pay only a small amount more than the next highest bid—even if your bid was thousands of dollars more.
NOTE:
The Auction Bidding End Time will be extended in five (5) minute increments so long as there is a higher Bid placed within the last five minutes of the Bidding Time Period.
Other bidders may be using the automatic bidding system because many Buyer’s use Q1 Real Estate’s automatic bidding system; Q1 Real Estate auctions may not behave in ways that make sense to you.
Manual Bidding
To Manually Bid, Click on the “Bid” Button. You may place a Bid for the Minimum Required Bid Set by The Listing Agent i.e. $1,000.00 or Bid an Amount that is Higher by placing an Amount that is in Multiple Amounts of the Minimum Required Bid i.e. $10,000.00 ($1,000 Minimum Required Bid x 10)
Automatic Bidding
Q1 Real Estate’s automatic bidding system is provided to the current high bidder in an auction listing. Through the system, Q1 Real Estate will bid automatically on behalf of the high bidder against underbidders. This allows bidders to bid very high while at the same time ensuring that they never pay more than the absolute minimum needed to beat the next highest bidder. Here is
How it works:
To use automatic bidding, bid the absolute maximum that you are willing to pay.
If the maximum you entered is higher than the bids entered by anyone else so far, you become the new high bidder. Q1 Real Estate “bids up” the auction on your behalf until the current bid is a small increment above your closest competitor’s highest bid, but no higher.
If your maximum bid is not the highest bid entered so far, Q1 Real Estate registers your bid but continues to bid on behalf of the high bidder, automatically outbidding you by one bid increment and no higher. They remain the high bidder.
Q1 Real Estate continues to automatically bid on behalf of whoever is the highest bidder at the moment, up to and including their maximum, until auction time runs out.
A Sample Q1 Real Estate Bidding Scenario
The following scenario helps to illustrate how the Q1 Real Estate bidding system works:
Start
Sam, Listing Agent, lists a property for sale on Q1 Real Estate Auction, with a minimum starting bid of $100,000, a 2.5% Buyer’s Premium and an Auction duration of 5 days.
Day 1
Current (public) bid: n/a; Minimum next bid: $100,000; Max: n/a.
The first bid is from Jack, who bids $200,000 even though the minimum is $100,000. Since there are no other bidders, Q1 Real Estate bids the minimum of $100,000 on Jack’s behalf and changes the minimum for any new bids to $101,000—the current bid of $100,000 plus the increment of $1,000.
Day 2
Current bid: $100,000; Minimum next bid: $101,000; Max: with Jack, up to $200,000.
The second bid is from Jill, who bids $101,000. Because Jack’s $200,000 maximum was higher, Q1 Real Estate immediately bids $102,000 on Jack’s behalf ($100,000 plus one increment) and resets the minimum to $103,000 ($102,000 plus one increment).
Day 3
Current bid: $102,000; Minimum next bid: $103,000; Max: Jack, up to $200,000.
Jill tries again, bidding $103,000. Jack’s maximum is still higher, so Q1 Real Estate immediately bids $104,000 on his behalf again and adjusts the minimum accordingly to $105,000
Day 4
Current bid: $104,000; Minimum next bid: $105,000; Max: Jack, up to $200,000.
Frustrated, Jill tries a fourth time, bidding $250,000. This is higher than Jack’s maximum, so Q1 Real Estate sets the current bid to $201,000 (Jack’s maximum plus one increment). Jill is now the high bidder and Q1 Real Estate is bidding automatically on her behalf.
Day 5
Current bid: $201,000; Minimum next bid: $202,000; Max: Jill, up to $250,000.
During the final moments of the auction, a new bidder named Ted bids the minimum of $202,000. Q1 Real Estate automatically bids on Jill’s behalf, outbidding Tim by one increment at $203,000.
End
Highest bid: $203,000; Highest bidder: Jill.
The auction ends after five days and at a specified time. Jill is the highest bidder, not for $250,000 (her maximum bid), but for $203,000 (one increment higher than her nearest competitor’s bid).
In the example above, two bidders (Jill on two occasions and Ted on one occasion) experienced the frustration of being instantly outbid by the high bidder because Q1 Real Estate was automatically bidding on their behalf.
On the other hand, Jill is able to be the Highest bid in the auction for $203,000 rather than her high bid of $250,000 thanks to the very same automatic bidding system.
Jill now submits a Written Offer (Real Estate Purchase Agreement = R.P.A.) to the Seller’s Listing Agent. The Purchase Price in Jill’s Offer is equal her Final Bid + the 2.5% Buyer’s Premium (Buyer’s Premium is set by Listing Agent and may vary).
Example:
$203,000 Final Bid
+ $5,075 Buyer’s Premium 2.5% of Final Bid Amount
$208,075 Purchase Price for Written Offer (RPA)
NOTE: The Seller reserves the right to Accept, Counter or Reject any Bid.
Automatic Bidding Caveats
Automatic bidding sounds simple and great. If there is a Property you want to be sure to be the Highest Bidder, you can place a single high bid without having to monitor the auction for days, yet at the same time you can rest easy knowing that you will never pay more than you absolutely had to in order to be the Highest Bidder at the auction.
The complications and confusion arise for three reasons:
Automatic bidding is for everybody. Q1 Real Estate does automatic bidding not only if you are the high bidder, but for all of the other Bidders as well.
The current maximum Bid is kept hidden from the other bidders.
Many Bidders will not be aware that Q1 Real Estate has this feature.
Avoid Under-Bidding by “Sniping” (Last-Minute Automatic Bidding)
Q1 Real Estate Bidding Is a Mishmash of Opportunity
The combination of automatic bidding, auction sniping, secret maximums, and a large portion of users that either are not aware of the automatic bidding or prefer to use one-click bidding means that Q1 Real Estate bidding is a mishmash of different strategies, expectations and possibilities.