AUCTIONS MAY BE AN ADDED FEATURE TO BUYING OR SELLING REAL ESTATE!

Selling a home by auction can often be a viable alternative to selling in the “conventional” way, particularly during a market slowdown, when there is a glut of unsold inventory, buyers are reluctant to commit, and are few and far between. A house can sit on the market for months, and maybe not sell at all. In these cases real estate auctions can offer a number of distinct advantages:

• Bidders must pre qualify for a loan and register to bid with a certified check
• Property auctions have a high visibility, and attract immediate attention.
• The Auction deadline for final bidding creates a sense of urgency and heightens competition among buyers, and as a result the property can often be sold for a higher than expected price.
• The seller knows the house will be sold within a specified time frame.
• The seller sets the terms and conditions of the sale, avoiding haggling over price, counter offers, etc.

An auction can attract potential buyers who may assume the property is being auctioned due to the owner facing financial difficulties or foreclosure. Although this is sometimes the case, other situations such as a company transfer, an estate sale, or a home owner wanting to avoid the uncertainties of the current market and sell quickly, may be the reason the property is being auctioned.

There are basically two ways to sell a home by auction. Setting a reserve or floor price means that the bidding must start at or above a specified figure and the house will not change ownership unless the highest bid is at or above the minimum stated price. Set the starting bid price attractively, and at a market value competitive with the selling price of similar homes for sale in the area, particularly if equity in the home is not sufficient to auction the home at an even lower than market price, which would be ideal, or circumstances warrant a sale at any cost.

An absolute auction is one in which bidding can begin at any price, and at the end of the bidding deadline ownership of the property is awarded to the highest bidder, regardless of the price bid. This is certainly a riskier method of auctioning a home, but absolute auctions often attract more bidders, and can sometimes be more profitable than expected due to the increased competition.

Lastly, whether or not to sell a home by auction should be based on a thorough evaluation of one’s circumstances, and an equally thorough examination of other alternatives in addition to your Realtors added services may be provided.

For more information regarding the process or upcoming auctions in Olympia, Lacey, Tumwater, Rochester, Tenino, Yelm, Rainier, and Centralia please contact Nancy Griego at (360) 870-9770