When most people think of auctions they think of buying, but in order to buy someone must be willing to sell. Selling at auction for real estate is a great way to get your real estate sold.
As a general rule of thumb, your property should be in the same price range as the other properties in the auction. The last thing you want to see is that the majority of the properties in the auction are derelict homes in a low value area when you are trying to auction off your four bedroom, 3 bath, updated kitchen and family room home. You are most likely to not have much luck selling your home at market value since everyone at the auction is comparing prices on the other available properties.
Selling at auction requires a legal agreement and most auctioneers will wish to enter into a sole agency agreement. This means they will advertise your property in brochures and catalogues on your behalf with the understanding you will be contribute to the costs of that advertising, as well as a portion of the room fee, regardless of whether someone buys your property or not. Generally speaking, this is standard paractice. There may be other fees involved, too. Be sure to find out about the charges before you sign any documents. Once you have satisfied yourself with the agreements you should discuss pricing. Find out the likely market value of your property and discuss with your auction specialist Realtor what type of auction is best for your situation: Absolute Auction, Minimum Bid Auction or Reserve Auction.
Now that you have everything in place there is nothing left but attend the auction. As the seller you must attend the auction due to a variety of reasons, one of which is you may want to take a lower offer than the advertised reserve bid to get your property sold. When the gavel goes down that last time it signifies the agreement of a binding contract between buyer and seller and you have sold your home at true market value. The buyer must now pay 10% of the total sale price before leaving the auction house and in most cases must pay off the remaining balance in 30-45 days. Your responsibility as the seller is to guarantee your ability to legally convey the property to the new buyer. Selling at auction has its advantages for buyer and seller and can be the way to go depending on your motivation and comfort level.