Description: When the real estate market is as slow as it is now, homes can sit on the market for months.But
auctions, both online and in-person, are emerging as a fast sales
option. In fact, an online auction could even sell a house in minutes! The US experienced a same slow real estate market in 2007. In 2007, Early Show financial guru Ray Martin explained how home auctions work, and when they can be a good choice for buyers and sellers. Here is the news.
It’s not a secret that houses can sit on the market for many months when the real estate market finds itself going through a slow period such as right now, but both in-person and online auctions are emerging as a rapid sales option. In just a couple of minutes, an online auction could sell a house!
Ray Martin, a financial guru, recently explained how house auctions function, as well as when they can be considered a good option for sellers and buyers.
According to Martin:
The popularity of real estate auctions is on the rise, and they’re not just houses in foreclosure and fixer-uppers anymore. Builders, real estate agents, and individual sellers are starting to turn to auctions.
Whether auctions are conducted through an auction website or conducted live, the process is usually the same: Sellers are the ones who place their houses on the block and determine different things such as the price and how long the auction will be listed. After this, bidders are invited in order for them to inspect the homes, and then, the auction is opened.
There are three types of auctions: absolute auctions, minimum bid auctions, and reserve auctions. For sellers and buyers, it’s very important to be aware of the difference between them.
When it comes to a reserve auction, the seller has to set two prices, the reserve price (minimum amount seller would accept from bidders) and the initial bid price, which bidders will be well-aware of. Unlike the initial bid price, the reserve price is not disclosed to the bidders. When the bidding comes to an end, and if no bids have exceeded the reserve price, the bid that is the highest is then reduced to an offer. Within a specified amount of time, the seller will either accept or reject bid.
By initially entering low bids, buyers try to guess the reserve price. When they fell to meet the reserve price, they receive a message that their bid has failed. Their bids will be rejected until they enter a bid that is sufficient to meet the reserve.
In a minimum bid auction, the auctioneer will only accept bids that are abovethe minimum price that has been established.
Often referred to as the most exciting type of auction, in an absolute auction, there’s no reserve price. This means that the property is sold to the highest bidder, no matter what the bid is. The bidder must be ready to have his/her bid accepted and purchase quickly since a sale is guaranteed in this type of auction.
Reserve auctions seem to be the favorite of sellers because if the reserve price is not met, at least the seller will know by examining the price of the bids received what the market forhis/her housecurrently is. If one’s stop to think about it, at the end of the day, the value of a house is ultimately the price that buyers want to pay.
House auctions provide results fast, which is why they can be attractive to sellers. Sellers should have a lot of equity in their houses when considering auctions. House auctions can eliminate the showing of houses and create worldwide exposure on the web.
For buyers, home auctions are a great option because clear titles can be attained and the inspection of a home can be conducted before purchasing. (Purchasing a home through foreclosure sales quite frequently results in purchasing a home with encumbrances and additional liens on the title.)
There are many online sites devoted to online auctions, including auctioneers.org, rasnw.com, and realtybid.com. These websites can aid one in locating live auctions in one’s area, as well as the online auctions where one can bid on houses.
Local trade newspapers and local newspapers are also other great places to learn about auctions. For those individuals who arelooking to move to another state, the Internet usually allows one to attain trade newspapers from across the country.
It would be wise to set reserve and opening prices, create a marketing plan, and offer incentives if you decide to sell your house via an auction.
When opting to take the auction route, buyers should go the extra mile to research the market, inspect home, and set a limit on their bids. You need to visit the house listed for the auction in order not to attain a surprise later on down the road. Another tip for buyers is to attain financing ahead of time.
Realtybid.com is an online real estate auction platform.
The Similar online real estate auction platform in Canada is: bidwin.org