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Benefits of real estate auction to the seller, buyer, and real estate agent

Posted on February 26, 2007. Filed under: buying property, buying real estate, real estate, real estate agent, real estate forums, real estate keywords, real estate market, real estate tips, selling real estate |

by Global Property Guide team

Lost between the ins and outs of real estate auctions? Here’s a little primer that might actually help!

What is a Real Estate Auction?
How will auction benefit me?
Benefits to the Seller, Buyer, and Real Estate Agent/Broker

Q. What is a Real Estate Auction?
A. A real estate auction is an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property — most certainly including those that are nondistressed — through open cry, competitive bidding.

Q. How will auction benefit me?
A. The real estate auction is a win-win proposition for everyone involved.

BENEFITS TO THE SELLER:
* Buyers come prepared to buy
* Quick disposal reduces long-term carrying costs, including taxes & maintenance
* Assurance that property will be sold at true market value
* Exposes the property to a large number of pre-qualified prospects
* Accelerates the sale
* Creates competition among buyers – auction price can exceed the price of a negotiated sale
* Requires potential buyers to pre-qualify for financing
* The seller knows exactly when the property will sell
* Eliminates numerous and unscheduled showings
* Takes the seller out of the negotiation process
* Ensures an aggressive marketing program that increases interest and visibility

BENEFITS TO THE BUYER:
* Smart investments are made as properties are usually purchased at fair market value through competitive bidding
* The buyer knows the seller is committed to sell
* In multi-property auctions the buyer sees many offerings in the same place at the same time
* Buyers determine the purchase price
* Auctions eliminate long negotiation periods
* Auctions reduce time to purchase property
* Purchasing and closing dates are known
* Buyers know they are competing fairly and on the same terms as all other buyers
* Buyers receive comprehensive information on property via due diligence packet

BENEFITS TO THE REALTOR:
* Generates a list of ready, qualified buyers
* Offers clients and customers new selling and purchasing options
* Increases revenue and market share
* Develops your own market niche
* Assurance that property will be sold at true market value
* Property is sold within a relatively short period of time
* Exposes the property to many potential purchasers
* Auctions bring people in to look at all your listings, not just the auction listing
* Successful auctions result in referrals and return business
* Agents can earn commissions as referring agent/broker, cooperating agent/broker, or as the listing agent/broker

via Realtor.org