First time buyers,
If you have never been to an auction or bought real estate at an auction, a typical question is how does an auction work?
It works quite well actually, buying at an auction is a simple open process. As a potential bidder it is important to be well informed and well prepared prior to the actual auction date. The auctioneer has basic information in the auction brochure; address, date and terms and conditions. For more information one should request a bidder’s information package.
Registration and Payment
Each bidder will be required to register and have a bid number. To receive a bid number one must show evidence of the required earnest money, either cash, cashier’s check, or bank letter of guarantee. (see terms of the particular auction for specific information)
Bidding at real estate auctions is open to the public. The auctioneer calls for bids. The bidder should raise their bid number in the air when the price level is where they would be interested in purchasing.
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Advantages of buying real estate at an auction
- Buying real estate at auction has many advantages. The most obvious is the ability to name your own price for a piece of property. Another notable benefit is the straight forward terms and conditions of the auction.
- Different owners sell for different reasons, but one point remains constant, the time value of money and the ability to leverage swift results. Markets can change quickly, and holding properties for long periods of time can erode equity rapidly as values continue to decline.
- Auction marketing works well in both weak and strong markets. The auction process will inform and attract potential buyers, motivating them to compete for the purchase of your property. This competition offers an advantage over the traditional listing method, in which the real estate broker continues to encourage you to reduce the price to move the property.
- Attorneys, trustees and individuals with other types of fiduciary responsibility recognize the value of the auction method of marketing assets for both speed of sale and the fact that the legal system favors open, public bidding.
- Institutional investors in real estate now have an excess of Real Estate Owned (REO) properties in their portfolios. The current market conditions necessitate the reevaluation of these assets held by institutional investors. An auction marketing plan can be a useful to reduce the inventories of excess properties.
- The largest single user of auction services for marketing real property is the U.S. government.
- All types of people sell their property at auctions. Individual owners of farms, homes and small businesses use the auction method routinely for many of the reasons listed below. Whatever the reason is to sell your property we will work with you to develop a successful auction marketing plan for you and your property.