Real Estate auctions certainly are an effective and innovative way to sell property. A real estate auction gathers a host of potential buyers, whom the seller has to spend very little effort in marketing the property to and the seller ends up with quite a good amount from the sale of his property.
Although real estate auctions are more effective and faster that personal selling of property, the process or selling property goes through certain stages.
The Stages of a Real Estate Auction
1. Advertising
The general public is made aware that a particular property is going to be auctioned off by placing advertisements in the local newspapers and a notice is also placed on the property being auctioned.
2. Preparation
Potential buyers then seek further knowledge about the property, which is mostly done by reading the auction guide. It is imperative for bidders to possess information about the property because they need to know how much to bid as well as what they are bidding on. It is here that bidders are likely to decide their minimum and maximum bid for the day of the auction.
3. Inspection
During the inspection period, potential bidders can inspect the property in question physically and this is quite an important stage in the process of a real estate auction because this can strengthen the bidder’s decision to bid on the property or he may lose his interest once he notices faults and problems with the property. The inspection also gives a potential bidder the chance to alter the minimum and maximum bids that he had decided on, depending on the worth of the property.
4. Registration
After inspecting the property, bidders need to register with the real estate company that is handling the auction. Upon registration, bidders need to provide their personal information and identify proof which prevents the involvement of fraudulent bidders.
5. Bidding
On the day of the auction, before it begins, bidders are provided with a bidding card which they use to place their bids. The auction is then declared open with the auctioneer stating the opening bid and the splattering of numbers begin. The whole atmosphere at a public auction is quite intense and filled with a competitive spirit, where each bidder tries to outbid the other. The auction ends with the highest bidder’s bid that had no other competitor to challenge his bid.
6. Transfer or Ownership
It is declared that the property will now belong to the highest bidder, who is supposed to make an initial deposit at the site of auction itself and pay the remaining amount within a 24 hour time frame. After certain legal formalities and paperwork, the ownership of the property is transferred to the highest bidder.
A Real Estate Auction is a win – win situation for both the buyer and seller. Not only does the seller benefit from this sale of property, but the buyer too is bestowed with benefits from his/her purchase of property from a real estate auction.
How Real Estate Auctions Benefit Buyers?
- 1. Real Estate is considered a safe investment because of its demand in the present times.
- 2. Properties to be auctioned off are set at a fair market value.
- 3. The seller will not back out on his commitment to sell the property.
- 4. Auctions take place in full view of the public; hence there is no room for discrepancies and dishonesty.
- 5. As a buyer, the purchase price of the property is in your control as only you can decide your minimum and maximum bid.
- 6. Buying property at a real estate auction is less time consuming because continuous negotiations are eliminated and the whole bidding process closes within minutes.
- 7. The purchasing policy and terms of purchase are equal for all buyers gathered at the auction.
How Real Estate Auctions Benefit Sellers?
- 1. Awareness about the Real Estate Auction attracts potential buyers; hence, buyers come prepared to make a purchase. Therefore, the seller is bound to make a sale, unless his property is priced too high above its market value.
- 2. The seller does not have to spend too much time trying to sell off his property because real estate auctions are quick and hence, he can quickly dispose his property off and avoid long term taxes and maintenance costs.
- 3. The property will be sold at market value, because that is the opening bid of the property.
- 4. Real Estate Auctions create competition between buyers and hence the seller can rake in a good profit as the bids keep getting higher.
- 5. Unscheduled and numerous showings of the property are eliminated.
The field of real estate is now noticing the trend of real estate auctions catching slowly and increasing in number because it benefits both the buyer and seller. The realtor also benefits from this entire process because successful auctions translate into a successful business for him.
