Wilson Auction & Realty Company handles residential real estate and land auctions as well as commercial property auctions in Ohio, Indiana and Michigan. What are some property auction myths that most people assume are true, but they’re not?
Only Foreclosed Properties Are available
One of the main property auction myths is that whatever’s up for auction is because the owner is in bankruptcy and their property is in foreclosure. While this may sometimes be the case, it’s not the sole/only reason for auctioning property. Other reasons can include the owner wants to control when their property sells rather than having to wait and gradually reduce the listing price, or maybe they’re builders who are closing out a project and would rather sell it at auction than go the traditional route. Properties may also go up for auction because owners are settling an estate or lenders are seeking a quick, non-contingent sale. Auctions can help owners save money because they’re quick and efficient.
You’re Being Rewarded For Someone’s Misfortune
Some people don’t like the idea of property auctions because they feel like they’re taking advantage of someone else’s misfortune. That’s a myth. Sure, some properties are put up for auction because the owner couldn’t afford to pay the mortgage, but there are plenty of other reasons auctions occur. For most sellers, they just want the speed and transparency of the auction process, which, in turn, helps boost the local economy.
You Aren’t Allowed to Inspect
Another myth is that if a person buys a property at auction they lose their opportunity for that property to be inspected. With auctions, during the marketing period, interested buyers are given the chance to tour the property and bring in their own independent inspector. Potential buyers are responsible for paying for the inspection, but at least it’s an available option. Remember, with auctions, things are sold “as is,” so it makes sense to inspect a property before you buy it, if you get the chance and the opportunity is made available to you.
No Financing Opportunities
One of the other myths about property auctions is that buyers have to pay in full with cash. While you could pay in full with cash, most buyers pay using a combination of both cash and financing.
Only Certain Bidders Win
By the way, there’s a myth that only rich and experienced bidders go to property auctions, or that they’re somehow “private.” The reality is that auctions are open to the public, to anyone who can pay the deposit required to be considered a bidder.
Here’s a good one: “The auction company places people in the crowd to bid for the seller.” That’s a myth, and it’s, for the most part, illegal anyway. Any reputable auction company is not going to allow “shill bidding.”
You Won’t Get Top Price
One of the worries sellers might have is this: “If I sell my property at auction will I have to settle for a lower price than if I went the traditional route?” Keep in mind that every property has a value. That value is totally based on what ready-and-able buyers are willing to pay in the market at the current time. Buyers ultimately determine market value. Auction marketing campaigns are aimed at potential buyers who are both interested in acquiring properties and have the money to do so. So, one shouldn’t worry about “getting a low price.” Remember, too, that auctions involve competitive bidding, so sellers might even make more money using the auction route than the traditional route.
Finally, there’s the myth that selling property at auction costs “a lot more in commission” than if a seller hires a realtor. While auctioneer services may cost more, it’s usually just slightly more. That said, the auction process might actually help a seller save money because the process eliminates long-term carrying costs such as maintenance and taxes.
Are you Interested in learning more about online auctions for residential and commercial properties in Ohio, Indiana and Michigan? Please call Wilson Auction & Realty Co. at 866-870-5500 or use the online contact page, here.