Real Estate Auction Basic Information

Real Estate Auction Basic Information

The very first thing to do, is determine whether a real estate auction in your best interest. We have to start with some basic questions.

  1. Is the price that you are seeking for your real estate reasonable in today’s market ?
  2. If the answer is yes, then it must be decided which type of auction is in everyone’s best interest.
  3. There are 2 types of auctions, “absolute” which means the real estate sells to the highest bidder, regardless of price, the second type is “ with reserve, or subject to confirmation” this means that a bottom line price is set at the contract signing, and agreed upon by both the seller and the auctioneer. That means that the real estate will not be sold for a price less than the pre agreed price. The reserve price can be adjusted downward on auction day but never adjusted upward
  4. Real estate auctions depend on the competitive bidding process, therefore the more the auction is promoted, the more bidders will attend. It must be stated that , “absolute auctions” draw more bidders.
  5. The reasons people choose the auction process, are mostly for the time factor, however “the time value of money “ plays an important role in the decision to auction real estate, as well as the competitive bidding process. 
  6. When properly promoted, a real estate  auction will generate a price that is reflective of the  real estate market at the time of the auction.

Proceeding with the Auction

  1. Signing of the contract, determining the date and time of the auction,     determining the marketing plan, and determining the advertising budget.
  2. Proceeding with the plan, and determining the terms and conditions of the auction. I require that the successful bidder, will give on auction day, a nonrefundable deposit in the amount of 10%  of the successful acceptable high bid. The balance will be given at close, within 30 days after the conclusion of the auction. 
  3. I encourage participation from other brokers, and they must register their client no later than 48 hours prior to the auction. All inspections must be completed no later than 48 hours prior to the auction.

Jeff Bub Auctioneer,          Keller Williams Realty        216-544-6729