How to buy or sell a property in a real estate auction

If you ever wondered how to buy or sell a property at an auction house real property, then keep reading …

Real property auctions are a new type of real estate sales. They have been around for many years.

Auction and Real Estate Agent

Real estate agents sometimes can recommend a property is placed for auction rather than listing in local Multiple Listing Service, usually referred to as the MLS

Many agents do not realize that when recommending a property is sold at auction, can continue to maintain a working relationship with the seller.

A real estate agent can further assist a seller by:

• Be present at meetings with the seller and the auction house
• To draw the list and receive a referral from the auction house
• Provide the auction house with the property, mortgage information and seller

Normally, real estate agent will retain the seller as long-term customer, helping to sell the property quickly and provide advice to the campaign.

In addition, the buyer representatives may receive a commission from the sale of a property auction by submitting a participation agreement reached for the auction house.

There may be many benefits of selling property at auction that can include:

Properties sold with clear title

When properties are sold, a title search is performed to verify and validate that there are no outstanding liens, judgments or other issues that can cloud a title.

Selling or buying property quickly

Sometimes a property can be sold more quickly after placing it for sale with a realtor. There are many factors affecting when selling a property, which include: market conditions, property condition, urgency, probate and others.

The sale of a property "as is"

When a property is sold through auction, it is considered an "As is" sale. This means that the sale will occur no contingencies or negotiations. Repairs will not be simply sold "as is".

Seller determines the conditions of sale

The seller of a property available for auction sets the terms of the sale. These terms include the auction be an absolute sale or reserve price.

Absolute – An absolute auction is where a property is sold to the highest bidder regardless of price. Sometimes Sellers can benefit from receiving more than they were expecting, on other occasions you may receive less.

Reserve Price – An auction Reserve price is one where the seller places a reserve price on the sale of the property. If no bids meet the reserve price, the seller can not sell the property.

The seller is motivated

Buyers know that when a property is available for outright sale, the seller is motivated. This can work both the seller and the buyer of favor.

Buyers are qualified and committed

The sellers know that when a buyer attends an auction, they are ready to buy. Many auctions require that buyers have a higher rate of buyers before the auction takes place. Only attendees who have paid the fee of buyers can actually make an offer on a property.

Buyers control the price paid

Buyers can receive the benefits of an auction by buying a property for less than appraised value.

Auction Process

The process begins by making the decision to auction the property. Then, either a real estate agent or contact a sales auction house. A representative of the auction interviews with the seller and to collect and display information about the ability of the auction of the property. Some decisions made during this time are:

Marketing Fee – This fee is normally paid by the seller as a front cost and can be based on an analysis by a team of marketing specialists.

Auction Type – Either an absolute or a decision of the reserve auction price must be made.

The expectations of the sellers – Terms and conditions of sale Vendors are expected to prices, terms and rates.

Once all agree the property is a valid auction candidate and the type of auction is decided, the date of the auction is set. The auction house then begin to market the goods they can take 4-6 weeks.

During the marketing campaign and before the auction, buyers are able to do their due diligence. You can schedule the inspections, evaluations, and view the property.

Summary

While real estate auctions can not be for everyone, providing alternative methods that can benefit both buyers and sellers.

When a real estate agent recommends a property for sale, may continue to participate in the process, receive referral fees and continue to provide quality service to your customers and clients

© Copyright 2008 Jennifer MacKay. All rights reserved.
About the Author

As a Keller Williams Success Realty Real Estate agent and REALTOR® working in Panama City Florida, my mission is to provide the public with quality Panama City Florida Real Estate services!

I believe the future of Real Estate sales will be maintained and driven by the online power of the consumer.

I am a customer driven REALTOR® dedicated to providing results and exceptional service to all you, my customers.

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