USA: Auctions are mostly chosen by sellers who would like to sell quickly and are ready to accept a price that is lower than the market value of their property. These properties may also be bank owned homes, distressed properties and tax foreclosures.
Auction sales may be advantageous also for sellers who do not need to sell fast, as they can be marketed easily and establish a deadline for the client to take action. The seller can maintain full control by setting a reserve price. Auction sales contain only a few or no contingencies for the sale and are usually closed within 30-45 days.
Real estate auctions start with seller who are ready to accept a discounted price for the sale of their home. After having determined the market value of the property, the seller and the auctioneer set the property price and choose the kind of auction that best suits the seller’s criteria.
There are several types of real estate auctions. In the Absolute Auction the real estate property will be sold to the highest bidder regardless of price. In the Auction with Reserve, the seller or his agent – who have set a reserve price – can accept or decline bids, if they do not reach the established minimum acceptable price. A Ballroom Auction is carried out in meeting rooms or other indoor locations. With the Bidder’s Choice, the successful bidder has the right to choose his property from a group of similar properties.This approach is commonly used for the sale of building lots, timeshares and condominiums. During Caravan Auctions, bidders and auctioneers travel from location-to-location and are always present at each property. A Foreclosure Sale takes place when a lender cannot collect on a loan and has obtained a court ordered sale. In the Minimum Bid Auction, the auctioneer accepts bids from a minimum price. Last but not least, there are Sealed Bids, where confidential tenders are submitted and opened at a predetermined place and time. This approach does not allow the reaction of bidders, but it may be advantageous for the seller, since bidders are obliged to place their best and final offer.
Sellers should be aware of the various possibilities offered by the real estate market and evaluate which may be the most convenient choice to make the most out of their sale.
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