Real Estate Auctions

Yesterday we had Nicole Kelley come talk to our office about Real Estate Auctions. It was very informative! Here are a few of the things we learned:

- Just because a house in up for auction, does not mean that the owner is behind on payments or the home is in foreclosure. Many times Auctioned off homes go for market value - it's just a faster way to get to the end result.
- When you list a home in MLS, you list at the highest price and work your way down. In an auction, it's just the opposite. You start low and end up high.
- An Auctioned home is sold "as is, where is, with NO contingencies". Any financing issues or inspections must be done prior to bidding. It is up to the buyer to do their due diligence on the property.
- A 10% buyers premium is typically added to the sales price to pay the auction company and any agents involved.
- An auction is really about turning an asset (home) into money (quickly).
- Auctions are typically marketed for a few weeks before the actual event.
- Most auctions close within 30 days.
- Properties are not giving away, they typically go for market value!
- There are three types of Auctions:
- Absolute Auction - The property is sold to the highest bidder, regardless of the price
- Minimum Bid Auction - The auctioneer will accept bids at or above a published minimum price.
- Reserve Auction - A minimum bid is not published, and the seller reserves the right to accept or reject the highest bid.

Auctions are not for everyone, but there are some sellers that can benefit from them.