Real Estate Auctions for Dummies

If you are having trouble selling your home, or are in need of selling your home as soon as possible (maybe you are starting a new job in a new city in less than three weeks), you might not want to put your house on the market — it could end up sitting there for weeks. Instead, choose real estate auctions.

What are real estate auctions? This method of selling a home is very effective; it is fast-paced and intense and deals with the public sale of any property. If you can picture an intense public bidding war at an antique auction, this is exactly what you should picture for a real estate auction.

The benefits: A real estate agent, who provides you with evaluative information about your real estate options and helps you negotiate deals when purchasing a home, is often not needed during the auction process. Essentially, it is a win-win situation for all parties.

Seller’s Benefits:

1. Everyone there is willing to buy
2. Quick purchase means no dragged out costs, like taxes and maintenance, on the property
3. Auction shows the property to a large number of potential buyers
4. Your home price can exceed the starting price because of increased competition
5. You and the real estate company will know exactly when the property sells

Buyer’s Benefits:

1. Properties are usually purchased at a fair market value compared to other private real estate listings
2. The buyer knows that the seller is absolutely keen on selling, so no more need for a real estate search
3. Regarding multi-property auctions, the buyer has options to pick from all under one roof
4. You, the buyer, determine the selling price
5. No more need for real estate agents to negotiate a purchasing price; highest bidder wins

So what happens if you find yourself at a housing auction either to sell or purchase a home? You may first want to consider asking these three important questions:

• What is the auctioneer’s background and experience in the field? The auctioneer must be a certified real estate broker and needs to be able to produce a license to sell at auctions. Ask how long he has been in the business, does he know the fair prices of most homes? The average home price in April 2014 was $151,833.
• What is the auction going to cost? Real estate auctions can often charge both the buyer and the seller. Some auction houses charge a “buyer’s premium,” which is a fee up to 10% of the cost of the house. Since the median home sales price decreased 3.2% last year, be sure to know how much you owe if you buy a home at auction.
• Do you understand the auctioneer’s sales tactics and marketing plans? Auctioneers with use various strategies to try and sell your house at top dollar, so make sure you get a strategy proposal from each auctioneer before choosing. The proposal should outline how they will advertise your home. Make sure it is a written document.

Going to a home auction for the first time, or selling a home at auction for the first time, can be a bit nerve wracking, so try to stay in the moment and make sure you are confident about knowing all of the information. More like this.