I work with buyers looking for large waterfront properties so I watch the large waterfronts going to auction, let’s face it; the seller is ready to sell and move on with their life.
There are 3 different types of Auctions
Absolute Auction (or auction without reserve): It goes that day to the highest bidder.
A. The property is sold to the highest bidder, regardless of the price.
A. Since a sale is guaranteed, buyer excitement and participation are heightened.
B. Generates maximum response from the market place.
C. Many sellers, including financial institutions and government agencies have begun to use this method more frequently.
Minimum Bid Auction
A. The auctioneer will accept bids at or above a published minimum price. This minimum price is always stated in the brochure and advertisements and is announced at the auction.
B. Reduced risk for seller as the sales price must be above a minimum acceptable level.
C. Buyers know they will be able to buy at or above the minimum.
D. The seller may, however, limit interest in the auction to only those buyers willing to pay the minimum bid price, and therefore it must be low enough to act as an inducement rather than a hindrance.
Reserve Auction (an auction subject to Confirmation)
A. Seller says yes he will accept or no he will not and has a limited time to do so such as, from immediately up to 72 hours after the auction. Many times buyers may not invest the time and expense of due diligence when there is no certainty they will be able to buy the property even if they are the highest bidder.
Picking An Agent
When picking an agent to work with, have your agent research comparable sales; try to purchase prior to the Auction, as we never know what the best bid will be at an Auction. Make sure your agent has experience of representing buyers at an auction.
At The Auction And Ready To Bid
Most of my buyers are on the conservative side and do not want to bid themselves and draw attention , so I ask the Auctioneer to furnish my buyer with an assistant to bid for them they handle the paddle and call out the bid as requested by my buyer (only tell them the dollar to bid and when to bid), remember they still work for they auction house who works in the seller best interest. Since working with buyers at auction I have paid close attention and found some ideas that I share with the buyer prior to the bidding. I found it has worked in my buyer’s best interest.
Seller Considering Using The Auction Method, Call ME I Can Help
If you are considering selling and want information on auctions, I also represent seller’s interest when introducing them to an Auction House. I would not have recommended using an auction 3 years ago, today I see prices at auctions have increased and it is another way to go. Auctions Houses same as REALTORs can negotiate their costs, with the seller, and the Buyer’s Premium, keep that in mind.
Glory Bee Costa
Keller Williams Select Realtors
Office: 410-972-4000 Ext 4032