How to Prepare for a Government Auction
Download the bidder registration form. You must provide specific information about yourself to register as a bidder for a government auction. This can be accomplished either by downloading a registration form to print out and complete, or by creating a bidder account on a government auction website.[3] X Research source [4] X Research source [5] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source Which method you choose depends on whether the property is being sold at a live or online auction, and which government agency or contractor is directly in charge. While most states have a single website for all state government auctions that are open to the public, federal auctions may be found through several websites, depending on whether the property is auctioned directly by the U.S. General Services Administration (GSA) or by a contractor. You can find the appropriate application materials for most federal auctions by visiting the GSA auctions website and clicking the registration button. BSCAmerica offers auctions of government cars that are open to the general public. Their application is available at
BSCAmerica.com.
Gather information. After you've had a look at the information required to register as a bidder, you may want to take a moment to gather any required documents so you have them ready before you complete the form.[6] X Research source [7] X Research source [8] X Research source The requirements may vary based on the type of property for which you want to bid. For example, if you want to bid on a motor vehicle, you must have a government-issued license to operate that vehicle. For most federal auctions, you also must present proof of your citizenship status. Some states also may restrict their auctions to individuals or businesses that reside in that state. To create an account to register for online GSA auctions, you must provide credit card information for a credit card issued to you, or to your business, if you intend to bid on government surplus property to use in your business.
Review bidding terms and conditions. Each government agency or contractor has specific terms and conditions that apply both to the bidding process and to the final sale if you make the winning bid. You must understand and accept these terms and conditions before you will be registered as a
bidder.[9] X Research source [10] X Research source The terms and conditions describe the rules and procedures for the auction as well as defining bidder eligibility. Generally, you must be at least 18 years of age and not be employed by the government entity selling the property. The terms and conditions also describe what happens if you win a piece of property at auction. Generally, you should avoid bidding on any item if you're not prepared to pay for it in full, because once you are declared the winning bidder you are contractually obligated to make full payment for that property.
Submit your required forms. Once you've completed your registration forms, you must submit them either electronically or through the mail so that you can become registered as a bidder before the auction begins.[11] X Research source [12] X Research source Make a copy of your form before you submit it, so you have it for your records. Even if you're required to provide a credit card number, there's no charge to register as a bidder. However, you may be required to pay a deposit to bid on certain properties. If you submit your registration online, you'll receive an email confirmation as well as a
notification when your registration has been accepted, so you can create a user name and password for your account.
Review the list of available property. Depending on how the auction is organized, you may be able to look at property directly on the website. The agency or contractor in charge of the auction also may have a list of specific items available.[13] X Research source [14] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source For online auction, the entry for each active listing includes information about the item or items being auctioned off, the location of the property, and the amount of the highest bid. You also can find a more detailed bid history that includes the date the auction began and the date and time it will end. Information for motor vehicles typically includes the year, make, and model as well as other relevant details such as mileage. If a vehicle is a standard transmission, the information typically will note that. If you don't know how to drive a standard car, avoid bidding on one. There typically won't be any statements made as to the condition of property. Everything
available at a government auction is sold as is.
Arrange to inspect the property in person. Particularly if you are planning to bid on a car or other motor vehicle, it's generally in your best interest to go and look at it in person before you place a bid.[15] X Research source [16] X Research source Keep in mind that a text description typically doesn't compare to being able to look at the item in person – particularly if the text description only includes basic information. Since all items are sold as is, it's important to get a look at it before you bid on it so you know what you're possibly buying. On the item's listing, you will find information about where it is located and the hours in which it is available for you to inspect. Most property, particularly vehicles, also are sold "where is." Keep this in mind if you are interested in a vehicle that's located on the other side of the country. Neither the government or the government contractor in charge of the auction will bring the property to you if you place the winning bid.
Line up your financing. If you place the winning bid, you may have to pay the entire amount immediately when the auction closes, so if you're going to
need a loan you should apply before you start the bidding process.[17] X Research source [18] X Research source [19] X Research source Even if you're given time to make payment in full after the auction ends, you typically won't have more than 24 hours. This may be long enough to find financing, but typically it's better not to attempt to wing it. Some auctions, such as those run by BSCAmerica, allow you to use as many as two forms of payment. This means if you had two credit cards, each with $10,000 limits, and you submitted a winning bid of $12,000 on a car, you could split that amount over the two cards. However, you may not be able to use multiple forms of payment. Figure out the maximum amount you are willing to bid on an item and use that amount to figure out your financing options. In the case of motor vehicles, you may be able to get a loan guarantee from a bank or other financing company. These guarantees typically are for a particular range. As long as your winning bid falls within that range, the lender will write you a loan for that amount.
Make your bid on the property. For online auctions, you generally can submit your bid at any time while the auction is open by
logging in and clicking the button to place a bid. For live auctions, you may have to show up at the auction site in person.[20] X Research source [21] X Research source Keep in mind that even if there is no reserve on the property, federal law – and the laws in many states – require the government to get at least fair market value for any property auctioned off. For this reason, you may not actually win the property even if you've made the highest bid. Particularly if you are bidding online, note well the location of the property. If you do make the highest bid, you typically must pick up that property as soon as possible after paying for it in full. In some cases you can make arrangements for someone else to pick up property for you, but this isn't always an option.
Receive notice of your winning bid. If you place the winning bid on an online auction, the agency or contractor in charge of the auction will send you an email notifying you of your win. In the case of live auctions, you typically will know immediately.[22] X Research source You will receive information on when and where to claim your property and what methods of payment are accepted. Typically you must pay a
deposit amount for your property immediately upon the closing of the auction. The amount of the deposit may be a flat amount, or a percentage of your total bid price. For example, BSCAmerica requires payment of a $1,000 deposit from the winning bidder at the close of the auction. The amount of deposit to be made should be listed in the bidding information for the item, as well as in the terms and conditions you reviewed when you registered as a bidder.
Make payment in full. After you're notified that you've won the property, you have a limited period of time – typically less than 24 hours – to complete any ownership transfer paperwork and pay the entire amount of your bid.[23] X Research source [24] X Research source You typically can pay using a credit card, money order, or certified check. If methods of payment aren't specified in the auction's terms and conditions, you may want to contact the agency or contractor in charge of the auction. In most cases, it's easier to only use one method of payment, but you may be allowed to spread the amount out, for example by using two credit cards. If you do not make payment in full by the deadline, you are considered to be in default.
Inability to pay your winning bid is considered a breach of contract, and you may be liable for significant liquidated damages.
Arrange for removal of the property. In most cases, once you've paid for an item you must remove it from the auction lot or government location immediately after the auction is closed. For larger items, you may be able to arrange for your property to be held for a limited period of time, but fees typically will apply.[25] X Research source Keep in mind that it is your responsibility to comply with any federal, state, or local laws related to the registration, possession, or transport of whatever piece of property you've purchased. Depending on the type of property you've purchased, you may be responsible for state or local use taxes on that item. When you arrive to pick up your property, be prepared to show a government-issued photo identification so you can claim it. You also should bring with you any ownership documents you've already completed, or notifications you've received from the government agency or contractor.
Federal and state governments sell seized and surplus property at government auctions, including motor vehicles and personal property such as computers and other equipment. You can get a good deal on these items by bidding at auctions, but it's important to do your homework first. If you place the winning bid, you typically must make payment in full and take possession of the property immediately – and whatever you buy is almost always sold on an as is/where is basis. To prepare for a government auction, you must register as a bidder and take the time to thoroughly research the property offered before you bid.[1] X Research source [2] X Research source