What Should You Know About a Real Estate Auction?

If you don’t know much about real estate auctions, this is a good article to read in order to familiarize yourself with what they are and how they work.

In today’s world, most people know about auctions and they tend to think of them as related to cars or artwork. However, real estate can and does get auctioned off, too. It’s an innovative, effective and fairly quick way to buy and sell properties in a public way with competitive bidding.

Why Sellers Like Real Estate Auctions

Sellers like real estate auctions because buyers come to the auction prepared to buy. Rather than put the property “on the market” and let it sit there for months with a few people showing “some interest,” the auction helps eliminate long-term carrying costs like taxes and maintenance. It gets the property sold quickly! Because people are bidding to “win” the property, it assures that the property gets sold at true market value– whatever the market will bear. Auctions expose property to a large number of pre-qualified prospective buyers. They have the money and are interested in buying– and they follow auctioneers in order to know “what’s coming up for sale” and “where and when auctions take place.” They care about such things.

Real estate auctions create competition among buyers, and it’s not unusual for the auction price to be bigger than the price of a negotiated sale. In other words, auctions can help sell properties for, perhaps, more than they’re worth just because two entities really, really want it/them! Potential buyers have to pre-qualify for financing, such that the seller knows they have the money to buy the property. And, when the property is auctioned off, the seller knows exactly when the property will sell– the date and time of the auction. This helps get rid of numerous “showings” and takes the seller out of the negotiation process.

Why Buyers Like Real Estate Auctions

Buyers like real estate auctions because they can usually find smart investments this way. Properties usually go for fair market value. In multi-property auctions, a buyer gets to see many offerings in the same place at the same time, which ultimately saves time, money and effort on their part. With an auction, the buyer knows the seller is committed to sell. And thanks to competitive bidding, the buyer is the one who determines the purchase price. For those who want to avoid long negotiation periods and want to purchase property quickly, real estate auctions are ideal. After all, purchasing and closing dates are known.

With most real estate property being sold the “traditional way,” there’s just so many offerings on the market that they become a blur. But an auction showcases a property. It draws attention to it. And this is what makes it attractive compared to traditional methods that have a hard time cutting through the clutter. Auctions create a sense of spectacle and urgency.

Furthermore, with auctions, there’s no ceiling when it comes to the price. Maybe a property would have sold for the asking price of $100,000 if marketed in traditional ways, but because it was put up at a competitive auction, and two people really wanted it, it sold for $200,000– twice the asking price. Nice, right?

Less Roadblocks

Traditional sales often involve “contingencies” which act as roadblocks… but auctions involve selling “as is,” so high bidders can’t back out. They realize they may need to do some “fixing up,” but they’re willing to take that risk since they’re getting a good deal.

With auctions, “the time is now” versus traditional methods of selling property where “it’s a waiting game.”

Real estate auctions work well for those with property to sell who want to create a sense of urgency and get a “fast sale done” without contingencies or the hassle of negotiations.

Wilson Auction & Realty Co. handles real estate auctions in Ohio, Indiana and Michigan. Instead of attempting to sell residential or commercial property on your own, where you’d have to determine your selling price, hold open houses, and advertise the sale, why not let Wilson Auction & Realty Co. sell your residential or commercial property at an auction? Get top dollar from a qualified buyer. For more info, please call 866-870-5500 or use the contact page here.