Real Estate Auctions Are Trending
Real estate auctions make it possible for you to own a home cheaper and faster. Today many people are taking advantage of real estate auctions. However, before you take that route please read the benefits and risks associated with real estate auctions.
As many people have discovered, the traditional realtor firm isn’t the only way to sell or buy a property. Real estate auctions are increasingly popular among people who buy and sell properties. As an alternative to the traditional marketplace, “the benefits of selling through auctions are particularly obvious during the bidder qualification period.” (Source: “Brokers See Benefit of Auction Process”, National Real Estate Investor) If you haven’t considered the real estate auction route, you should keep the following benefits and risks associated with the real estate auctions process in mind. You may find that it suits your property-selling goals.
Benefits of Real Estate Auctions
One of the major reasons sellers seek the auction format is because it often allows them to dictate terms and conditions as well as a deadline. Selling for cash also allows sellers to move forward with their plans without delay once the sale is made. Since roughly 90% of auction sales close, there is every possibility that the deal transaction will close without a hitch–particularly with pre-approved buyers in attendance at the auction.
When it comes to complicated properties, many auction houses actually recommend the use of brokers. This provides sellers with the best of both worlds–the auction format coupled with the selling expertise of the realtors. Often sellers obtain great prices for properties they sell at auction–more than they expected. This is usually because buyers come prepared with a cap and may bid until they reach that cap.
Risks of Real Estate Auctions
While selling properties at real estate auctions often result in a great deal, it doesn’t always. There isn’t any guarantee that the price will be bid up by other interested parties. Also, sometimes bidders do not have the opportunity to have home inspections. Buying a home without an inspection is risky for the buyer so, the more inspection information you can present the better. Property sellers “have dozens of decisions and choices on both advisor sale terms and many auction formats.” (Source: “Commercial Real Estate Auctions in Soft Markets”, Heritage Global Partners) It’s important to weigh these considerations carefully. What is the minimum acceptable bid or can the property simply be let go to the highest bidder? These questions must be mulled over in advance.
Sellers who sell at auction have to rely on marketing. While a great auction firm often has regular clientele, some may not do all they can to market your auction. You may want to promote your upcoming sale online or at other venues in order to attract potential buyers to your sale.
Work with a Reputable Real Estate Auction Firms
When you attend auctions hosted by reliable and respected auction houses, you’ll feel more comfortable about the process and may even find that some risks are mitigated. Many sellers find the auction route liberating. They can plan accordingly because they know what day they are selling their house. Working with a trusted auction firm with experience in real estate is essential for sellers who may be new to the action process. Watch the video below.
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These are a few of the pros and cons associated with selling a property at real estate auctions. Before you make your decision, talk to an auction house that can answer your specific questions and address all your needs.
Source:
“Brokers See Benefit of Auction Process”, National Real Estate Investor, http://nreionline.com/retail/brokers-see-benefit-auction-process
Lillian Dawn has worked in the asset auction industry for a number of years. Sources for this article can also be found at http://www.hgpauction.com/809commercial-real-estate-auctions-in-soft-markets/.
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