Who Sells Property at Auction? Several groups choose to use the Auction method of sale, including: Private home or land owners, farmers, timber companies, businesses, private partnerships, lending institutions, governments, churches and many other categories of owners.
What are the types of auction sales? Auctions are not a one-size-fits-all by design. An auction method is chosen for each Seller depending on their needs and the property that is being sold.
Examples of the most common types of auction include: live onsite, Estate Sales, online only, simulcast (live and online hybrid)
What types of properties sell at auction?
Any and all properties are sold at auction every day, including: homes, multi-family units, commercial buildings, condos, townhouses, vacant land, building lots, farm land, recreational land commercial land and many other property types.
Are there different kinds of real estate auctions?
Yes, auctions can be "absolute" or "subject to confirmation" with an (unpublished) "reserve."
What does "absolute auction" mean?
A property that is sold at absolute auction will sell to the highest registered bidder regardless of price.
There is no minimum. These types of auctions generate the most amount of interest because buyers are confident they have a real chance to buy if they are the winning bidder.
What does "reserve auction" mean?
It means that the property is being offered to the highest bidder, subject to the seller acceptance. Most real estate auctions are conducted with reserve, subject to seller confirmation.
What are the advantages of real estate auctions versus traditional sale?
It leaves Sellers open to underpricing or overpricing, both of which lead to loss.
Pricing also sets a ceiling, whereas auctions drive prices up and have no maximum or price limit.
Auctions create a sense of urgency and produce true fair market value.
What is "fair market value"?
Fair market value is the price for which a property will sell on the open market between a willing buyer and a willing seller, neither being forced to buy or sell as of a specific date. Fair market value is the price that a property will fetch at a well-advertised auction.
What qualifies whether a property is suitable for auction?
The owner does. An owner's motivation is the most important factor to determine the marketability of the property. The ideal candidate is motivated seller who has equity, good condition, favorable location for use and desirable amenities.
Can I auction a property that has a mortgage, taxes or liens owed?
Yes, most sellers have a mortgage or lien on their property. Any outstanding debt will be satisfied at closing from the proceeds of sale.
What is a buyer's premium?
A buyer's premium is the commission paid at auction by the buyer. It is usually 10 percent of the final bid price. The total contract price is calculated by adding the buyer's premium to the high bid.
Example:
High bid – $1,000,000
Buyer's premium – $100,000
Contract price – $1,100,000
What is the usual timetable for a real estate auction?
The typical timeline for sale is 30-90 days from the time your property is listed until the auction date.
This provides ample time to collect information, take pictures and video, distribute media, prepare documents and allow for property previews.
Where will the real estate auction be held?
Depending on the location, type of property and where potential Buyers will come from, the Auctioneer will determine rather an "on-site" auction, online only auction or simulcast is most appropriate. After conducting a property analysis and seller qualification, the Auctioneer will decide the best plan given your specific circumstances.
Will I sign an agreement if I decide to sell my property at auction?
Yes, the law requires Sellers to sign a real estate auction listing agreement.
