Why Would A Property Owner Use the Auction to Sell?
April 24, 2008
Here are a few reasons that a property owner would use an auction to sale a property.
1. Speed - In today's real estate sales environment it can take months to sell a home.
2. Date certain reduces long-term carrying costs. (Maintenance, mortgage payments, taxes)
3. The auctioneer requires potential buyers to be pre-qualified.
4. Exposes the property to a large number of pre-qualified buyers.
5. Buyers come prepared to buy.
6. Usually the property is sold with no contingences.
7. The seller can set a reserve price so as not to have the property "stolen".
The downside is that once a contract is made it usually cannot be renegotiated.
The costs can often be greater than the commission that a real estate agency might charge. If the seller's reserve is perceived as greater than the market value in a [potential buyer's eyes, the property will not sell and the seller is back to rethinking how to sell the property.
Even in an auction, price in this market is the driving force.
Here are a few reasons that a property owner would use an auction to sale a property.
1. Speed - In today's real estate sales environment it can take months to sell a home.
2. Date certain reduces long-term carrying costs. (Maintenance, mortgage payments, taxes)
3. The auctioneer requires potential buyers to be pre-qualified.
4. Exposes the property to a large number of pre-qualified buyers.
5. Buyers come prepared to buy.
6. Usually the property is sold with no contingences.
7. The seller can set a reserve price so as not to have the property "stolen".
The downside is that once a contract is made it usually cannot be renegotiated.
The costs can often be greater than the commission that a real estate agency might charge. If the seller's reserve is perceived as greater than the market value in a [potential buyer's eyes, the property will not sell and the seller is back to rethinking how to sell the property.
Even in an auction, price in this market is the driving force.
posted by shirley harry at 9:43 AM
1 Comments:
Shirley,
I think an auction is a great strategy and agree with your information. Have you looked at online real estate auctions?
There are many efficiencies that can be gained and the cost can be much less.
As technology improves, the online auction systems are getting better and better.
Tom Wood
REI Auctions
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