The buyer knows the seller is fully committed to selling the property on auction day
Real estate auctions are a streamlined method of real estate sales. People who sell at auction are usually committed to selling their property and are attracted to auctions because of the time defined, non-negotiation aspect of auctions. Purchasing property is a major investment, and buyers invest a lot of time preparing to purchase a property. It is common in your typical real estate sale for sellers to delay or even back out of the sale during the process, which can be extremely frustrating to buyers. Auctions eliminate this from the buying process, and buyers know the date it will sell. This gives buyers the ability to request a property information packet to conduct due diligence before the date of the auction. An added benefit is that buyers know the sale will happen in a timely manner and are on the same playing field as other buyers, These benefits hold true for development land or personal home.
Quick easy close
A major benefit of buying and selling using real estate auctions is that the process of buying property is faster. All buyers interested have done their due diligence and are pre-qualified. Auction listings are sold as-is and there are no negotiations, so when auction day comes there are no questions about what you are buying and the process is not drawn out. If you are attracted to closing on a listing in 30 days, auctions may be a great option for you.
Level Playing Field
With traditional real estate transactions all buyers and competing on different playing fields. Some buyers may have all-cash offers, waive appraisals or inspections or play on the emotions of sellers. With a variety of negation tactics, it can make it hard for buyers to stand a chance. With Auctions, all buyers are on the same playing field. The buyers have an equal opportunity to do their research and get their finances in order before the day of the auction. They also know that the listing comes as-is and that there are no negotiations going on between other buyers. Everyone bids on the property on the same day, at the same time, making the buying process extremely fair.
It is common for multi-property development land to be sold at auction. This gives buyers the option to bid on one property or multiple.
Ranch and Hunting properties are often sold using our auction method. This is because these specialty properties require a certain type of buyer and require someone looking to invest. If you are looking to buy specialty listings from commercial, development, or luxury property, auctions may be the ideal buying method for you.
Purchasing At Market Value
Since all buyers have adequate time to research the property, get an inspection, and review the property infomration packet, buyers come prepared to buy. Having educated, serious buyers establish the true market value of a property on the day of the auction. Buyers can see in real-time what others are willing to pay. You can walk away knowing that the price wasn't determined by the seller who had an emotional attachment or an inflated opinion.
As you consider using the auction process to buy property, there are some term to familiarize yourself with:
Selling the property without warranties as to the condition and/or fitness of the property for a particular use. Buyers are solely responsible for examining and judging the property for their own protection. Otherwise known as "As Is, Where Is" and "In its Present Condition."
A method of selling real estate in a public forum through open and competitive bidding.
A procedure that allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on a real estate prior to the auction. Absentee bids are usually handled under an established set of guidelines by the auctioneer or representative. The particular rules and procedures of absentee bids are unique to each auction company.
A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will pay for a given property.
An advertised percentage of the high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.
The package of information and instructions pertaining to the property to be sold at an auction event obtained by prospective bidders at an auction. Sometimes called a bidder packet or due diligence package.
An arrangement for third-party brokers to register potential bidders for properties being sold at auction for a commission paid by the owner of the property or the auction firm.
The fee charged to the seller by the auctioneer for providing services, usually a percentage of the gross selling price of the property established by contract (the listing agreement) prior to the auction.
The process of gathering information about the condition and legal status of assets to be sold.
Terms and Conditions
The printed rules of the auction and certain aspects of the Purchase & Sale Agreement that are read and/or distributed to potential bidders prior to an auction sale.
Want to learn more about buying at buying a property at auctions? Check out some frequently asked questions
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