How buying at auction works in the US
At many US real estate auctions, especially online and bank-owned sales, a buyer's premium is added to your winning bid to make the purchase price: a $300,000 bid with a 5% premium becomes a $315,000 contract. Online platforms commonly charge around 5% to 10%, while courthouse foreclosure sales often charge none.
You usually pay earnest money soon after winning, often 5% to 10% of the purchase price and sometimes up to 20%, and close in about 30 to 45 days. Courthouse sales can require full payment much faster. If you cannot close, you can lose the earnest money.
Financing an auction purchase
Conventional mortgages may be too slow or may not lend on a property bought as-is, so many investors use hard money or private bridge loans that can close within the deadline. These typically cost around 8% to 15% a year plus 2 to 3 origination points, and lend a share of the purchase price, often around 70% to 75%.
Arrange financing before you bid and confirm the auction's terms, the title situation and any inspection rights, because auction sales are usually as-is.
Worked example: a $300,000 winning bid
You win with a $300,000 bid and a 5% buyer's premium, so the purchase price is $315,000. The earnest money is 10% of that price, $31,500, due after the auction.
A hard money lender advances 75% of the price, $236,250, at 11% a year for six months with monthly interest-only payments and 2 points ($4,725) paid at closing. At closing you pay the remaining $47,250 of the price, $3,000 of closing costs and the points: $54,975. In total you need $86,475 of your own cash.
Interest totals $12,993.75 over six months, so the loan costs $17,718.75 including points, and the total cost of buying is $335,718.75.
What this calculator does not decide
This estimate does not check whether a lender will approve the loan, the property's value or title, or state-specific auction rules, transfer taxes and redemption periods. Some lenders lend on the after-repair value or their own appraisal instead of the purchase price.
If the property needs renovation funded by the lender, use the US fix and flip loan calculator .
To check combined loan to value with an existing mortgage, use the US bridge loan LTV calculator .
Use the right country page
This page stays in US dollars and uses US auction terms: the premium is added to the bid and earnest money is a share of the purchase price. The country choices above the inputs open separate local pages. Choosing United Kingdom opens the UK auction bridging loan calculator, where the deposit is 10% of the hammer price, VAT is added to the premium and completion is due in about 28 days. The inputs reset and amounts are not converted.
Inputs for the auction property loan calculator
Winning bid
Your high bid, before the buyer's premium is added.
Buyer's premium
The percentage the auction adds to your bid to make the purchase price.
Other auction fees
Any fixed fees charged when you win, such as technology or transaction fees.
Earnest money deposit
The share of the purchase price you pay after winning, often 5% to 10%.
Minimum deposit
A minimum earnest money amount, if the auction sets one. Enter zero if none.
Closing costs
Title, legal, inspection and transfer costs paid at closing.
Loan up to
The share of the purchase price the lender advances. It never exceeds the balance after the deposit.
Quoted interest rate
The note rate on your quote, not the APR. Hard money loans are usually quoted per year.
Rate quoted per
Year (nominal) divides the annual rate by 12. Choose Month for a monthly rate.
Term
The months you expect to keep the loan before selling or refinancing.
How interest is paid
Monthly payments are usual for hard money loans. Interest can also accrue to payoff or be retained up front.
Origination fee (points)
One point is 1% of the loan advance, commonly 2 to 3 points.
Origination fee payment
Paid separately at closing, or deducted from the loan.
Exit fee
A percentage some lenders charge at payoff. Enter zero if none.
CALCULATOR QUESTIONS
US auction property loan calculator questions
What is a buyer's premium at a real estate auction?
A fee added to your winning bid, usually a percentage, to make the purchase price. A 5% premium on a $300,000 bid makes a $315,000 price.
How much earnest money do I need?
Often 5% to 10% of the purchase price, sometimes more, due soon after the auction. Check the auction's published terms.
How long do I have to close?
Many auctions expect closing in about 30 to 45 days. Courthouse foreclosure sales can require payment much sooner.
Can I use a mortgage to buy at auction?
Sometimes, but timing and the property's condition often rule it out. Hard money and bridge loans are common because they can close quickly.
What happens when I change country?
The United Kingdom option opens the separate UK auction bridging loan page, in pounds, with its own rules. Your inputs are reset rather than converted.