Real Estate Auctions:How To Sell

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How To Sell

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The growing popularity of real estate auctions means that a once-specialized method of sale is now available to sellers of all types of real estate. No longer are auctions used only for distressed properties or farmland, for example. Thanks in large part to the explosive growth of online auction sites for merchandise, consumers have embraced the live and online auction concept for real estate, too.

Real estate auctions provide substantial benefits over a traditional, negotiated sale. Auctions are the most efficient way of setting price to the market as opposed to a continuum of constantly reducing the asking price until a buyer buys.

Here are some general guidelines for determining which properties will perform best in the auction marketplace.

High demand

Residences of virtually all kinds, including single family homes, condos, and townhouses.
Investment and income-generating properties such as apartment buildings and motels.
Bank-owned real estate (REO) in which the lender has possession of the property due to foreclosure.
Lender-authorized short sales. A short sale is a transaction in which the lender agrees to have the property sold for less than what is currently owed by the mortgagee.

Moderate demand

Vacant land.

Lesser demand

Highly specialized properties such as industrial sites.

Auction Strategy

REA’s auction specialist Realtors® provide sellers with an analysis of their properties and recommendations of which of the three primary types of auctions would be the best fit, based on the property and the goals of the seller.

Absolute Auction produces the highest amount of money for sellers because of the competitive bidding that results from buyers knowing the highest bid wins the property, regardless of what that bid is. Absolute Auction entails the most potential risk for the seller with the greatest potential reward.

Minimum Bid Auction provides the seller with a starting price where bidding will begin to ensure the property will not sell for less than what the seller designates.

Reserve Auction lets the seller accept or reject the highest bid for any reason. Minimum Bid and Reserve Auctions, while offering the seller a certain degree of safety in the potential sales price, also do not generate the same level of bidding. When setting pricing for a Minimum Bid Auction or Reserve Auction, a solid starting point is 40 percent to 50 percent of the previously listed price.

For more information about how to sell at a real estate auction, be sure to contact RealEstateAuctions.com at 312-235-2170.