Real Estate Auctions – More Popular Than Ever
Real estate auctions are great at collecting interested buyers into one buying atmosphere where they can compete for a chance at a great deal on property. Most real estate auctions allow the seller to set a minimum price. From there it can be a strong capitalistic event that brings a reasonable return for their home or property.
Real estate auctions vie for as many qualified buyers as possible. By gathering good buyers, competition increases and a seller is awarded a better price for their real estate. Keep in mind there are different rules at different auctions- a good idea is to register early and learn these rules.
The fact that there are good buyers on hand at the outset insures the transaction goes off well, resulting in faster closings. Buyers at real estate auctions have everything lined up beforehand. With an auction, the standard inspection process and negotiation about fences, appliances, etc. are out the window. You come to the event prepared and leave with the road to a deed pretty well defined.
Sometimes “No Reserve” auctions are set. This means that the property will sell to the highest bidder, even if the bid is below what the selling party was hoping for. These are fairly rare, but a great opportunity for a well prepared buyer. It is a solid deal, even when the seller isn’t happy with the deal.
More popular is the “Minimum Bid” real estate auction. The seller will set the starting price, or minimum, and that is where the bidding starts. The buyer with the highest bid get the deal. In a flooded market there may only be one bid. This must be considered by a selling party.
A “Reserve” auction gives the seller a right to accept an offer within a certain period of time. This deadline is predetermined in most cases. Minimums are not needed as the seller is not actually bound to sell. This reduces the level of enthusiasm from buyers as they are never guaranteed a property, even when they bid highest.
Not all real estate auctions are foreclosures or what is considered “distressed” property. Very high end valued real estate is often sold at auction because a qualified supply of buyers may be available and it is a fairly quick and easy process. The seller almost always has some level of control on the price, but wants a deal.
Getting a bargain on property is the goal of most buyers for sure. But mainly it is about being diligent with researching and creating a bidding plan. Having a top end price, or cap, on what you are willing to bid is the best way to get a reasonable deal. Leave emotion out of the transaction for best results.
The popularity of real estate auctions has been growing as of late. The economy has been struggling in some segments leaving a heavy supply of homes and properties on the market.
Sellers able to retain some control over the selling price, meeting at a healthy financial place with a prospective buyer makes this industry successful in many ways. It reduces the friction normally in place with standard public listing procedures.
Depending on how the auction is arranged, the seller often has complete pricing control and “yes” or “no” response to winning bids. There are also opportunities for the seller to relinquish all control, sometimes in estate sales, this is where the minimum is set and bidding begins.
This type of auction creates the biggest buzz and participation in the market. the prospect of a winning bid below market value is too good to pass up for those able to make investments in real estate.
Get educated, come prepared, and have fun! You may just find your dream property on the cheap!