Determining if your real estate is salable by auction is easy enough once the proper knowledge is gained. Likewise, if you're in the market to buy the following rule still applies. By utilizing the Two-Thirds Rule, we can easily find out if this route is best for you and your property.Properties best suited for auction will fall into many different categories of real estate including industrial, commercial and residential properties. Also, building plots and even boat slips will come across the auction block from time to time.
Utilizing The Two-Thirds Rule
The Two-Thirds Rule involves examining the 3 parts of the real estate economy. The market, property and seller situation. When 2 of the 3 of these parts lean toward auction, the seller should be informed that an auction situation could be their best scenario.
Following the characteristics of the market will help you understand when the best time to buy or sale. You have to know if the market is dull, flooded or dry. If the market is dull it may be good for the buyer because there is an ample amount of real estate on the market but it could be bad for the seller. This could mean selling for a lower price or not very quickly in some cases. A flooded market would be great for a buyer. Plenty of properties to choose from and even some wiggle room on price. The seller on the other hand may have to come down real low or if they're not willing to do that, may have to sit on the property for some time until the market changes in their favor. A dry market would entail very few properties on the market bringing only the highest dollar amounts benefiting only the seller in most situations.
They're a few characteristics to look for when determining if your property is suitable for auction. Asking a few simple questions about your property like is it unique, carry 25% or more equity, does it have a high carrying cost, is it vacant and is it difficult to appraise. Depending on your current market a property exhibiting these characteristicsmay be a good candidate for auction.
SellerThey're several instances in which a seller may be motivated to auction their property. These include a need of fast cash, retirement, financial problems, ready to liquidate estate, is moving out of state or country, is in the middle of a divorce or separation, expiring listing approaching and knowing an auction will bring a fair price.The Two-Thirds Rule is simple to use once a few simple questions are asked. If your situation matches two of the three categories to a reasonable extent an auction might be the best bet.NOTE:For more information on real estate auctions, contact the NATIONAL ASSOCIATION OF REALTORS® Auction Dept. at firstname.lastname@example.org.