Buyers Guide to Real Estate Auctions

The Associate Auctions buyer information guide was crafted to educate our audience on proper use of the real estate auction method.  Once this concept has been mastered, real estate auctioning can be used as a tool for individuals and real estate investors who want to reallocate their assets.  Understanding all the elements in the auction process will help decision-makers manage a successful real estate auctions.

Why Real Estate Auctions?

Real estate auctions level the playing field between sellers and buyers. As a buyer, you immediately know where you stand. You’re either the top bidder, or you’re not. In traditional real estate transactions, offers can be used as leverage against buyers to drive the price up. In auctions, the only competition you have is against other buyers. You have complete control over the cost, and whether or not you make a purchase.

How does a Real Estate Auction work?

Buying at an auction is a simple open process. As a potential bidder, it is important to be well informed and well prepared before 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. At Associate Auctions, we send out auction bidder’s information package prior to each auction to all interested buyers. This gives you the most update breakdown of each property.

Advantages of buying at an auction:

  • The ability to name your price of a piece of property, as well as your terms and conditions.

  • Owners sell for different reasons, but one point remains constant: the time value of money and the ability to get quick results. Markets can change quickly, and holding properties for long periods 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 to purchase 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.

  • 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 useful to reduce the inventories of excess properties.