- For AvalonBay, Long Island Filled With Risk, Reward July 29, 2010The region near New York City is one of the nation's toughest markets to development properties. AvalonBay is undeterred. […]
- Miami Tower Built for Storms July 28, 2010A Miami-based developer is seeking to capitalize on predictions of a rougher hurricane season, which may be a marketing opportunity for him and his new tower at 1450 Brickell Ave. […]
- Office Developers Revive Plans July 28, 2010With Europe's financial sector showing signs of stabilizing, developers have begun to dust off plans. A development boom, however, isn't likely anytime soon. […]
- It's a Low Point for High Point July 28, 2010Vornado Realty Trust is opting to forfeit a 2 million-square-foot furniture mart in High Point, N.C., to holders of its $191 million securitized mortgage. […]
Archive for January, 2010
Auction Financing
Potential bidders in a real estate auction must be qualified financially in order to participate. At RealEstateAuctions.com, we’ve got an auction financing resource that is literally on the map, nationally.
Bank of America is our preferred lending partner and we couldn’t be more proud.
Bank of America is the largest bank holding company in the United States, by assets. The company operates in every state plus the District of Columbia.
What it means for the consumer is unequaled access to the best financing products available.
Because of the accelerated transaction process that typifies a real estate auction, buyers must come prepared to close. The seller promises clear title at closing, ample inspection opportunities and a price he or she will accept that’s often considerably reduced from a previous listing price. Therefore, bidders must be prepared to close.
This means that auctions are not a place for tire-kicking. Bidders must have cash or financing in place to close within 30-45 days. Winning a property at auction, then starting the real estate financing process, is not the recipe for success. Auction contracts provide for no financing contingencies, no closing date push-backs because of a lack of financing. Bidders unable to close on the specified date risk their earnest money and possibly even more. Sellers may seek additional compensation beyond earnest money from buyers unable or unwilling to close beyond.
With auction financing such a critical component, there’s really no better choice than RealEstateAuction.com’s preferred lender, Bank of America.
What distinguishes our relationship with Bank of America is not only the programs and rates available, but the people. Thomas Faille is Bank of America’s Number One Professional Mortgage Counsultant. That’s correct, he’s Number One in the entire Bank of America operation nationwide. He and his team are regular visitors to the offices of RealEstateAuctions.com, educating our auction specialist Realtors about the newest loan options. And of course, Tom and his associates also meet with our clients interested in financing for auction and non-auction real estate. You can’t beat that kind of personal service from the best in the business.
Be sure to have your financing in order before registering to bid at a real estate auction. We’d be pleased if you’d consider our preferred lender, Bank of America, but off course you’re free to select any lender of your choosing. You’d certainly be wise to compare programs from different lenders, however. It’s always important to get a second and even third opinion on important financial undertakings like auction financing.
The History of Auctions
Auctions are increasingly seen as the best way to sell real estate, due to the benefits they provide for buyers and sellers, but the history of auctions is long and storied, dating back at least to Ancient Greece.
Auctions have likely been conducted from time immemorial, but Greek scribes in 500 B.C. were the first to leave a written record, telling of auctions being the only legal way to sell brides to prospective husbands. Particularly beautiful women were subject to vigorous bidding, and fetched the highest prices, while families of those judged less attractive had to add dowries or other extras to make the sale.
The word “auction” comes from the Latin word, augere, meaning “to increase” or “augment,” and Roman emperor and philosopher Marcus Aurelius was said to use auctions to sell family furniture, and others sold war plunder. Rather than the gavel used today, a spear was thrown down to signal the start of proceedings.
The history of auctions in America dates back to the Pilgrims’ arrival in the 1600s and became a popular way to sell land, crops, furs, livestock, and most notoriously, slaves. Just as today, they were seen as the fastest and most efficient means to convert assets into cash. During the Civil War, colonels regularly auctioned off the spoils of war and surplus, and auctioneers are still often called “colonel.”
Many auction schools started in the early 1900s in the United States, with the Jones’ National School of Auctioneering and Oratory win Davenport, Iowa thought to be the first. After World War II, the number of auctions held increased considerably, due to the ability to move real estate and personal property faster than the private market would allow. There are numerous types of auctions, but the ones commonly used for real estate are absolute auctions, reserve auctions and minimum bid auctions.
During the 1990s, technology was finding its way into the auction business. The online auction house of eBay was launched in 1995 and went on to become an “online leader” in the bidding business. With the increasing use of technology and the Internet, the future promises to be as interesting as the history of auctions. Many auctioneers today offer both live and online auctions to meet the needs of customers who could be anywhere in the world. Technology lets buyers participate in the sale without even being there, but as anyone who has attended an well-run auction will attest, being there is half the fun.
Absolute auctions
Of the three types of real estate auctions: absolute, minimum bid, and reserve, absolute auctions are probably the ones the casual observer is most familiar with. According to industry professionals, they definitely are the ones that generate the most excitement among spectators and bidders.
To explain briefly the differences between the three, in a minimum-bid auction, a seller sets a minimum price at which bidding must start. This gives the seller protection that the property won’t sell for an unacceptable price, but it can also deter people from participating if the minimum is set too high. A reserve auction, too, offers some protection to the seller, by giving him or her time to accept, reject or counter the highest bid. But reserve auctions tend to draw less interest from bidders because the sale is not guaranteed.
That leaves absolute auctions, also known as auctions without reserve, in which the property is sold to the highest qualified bidder with no limiting conditions or amount. Of course, sellers cannot bid on their own property, either personally or through an agent. This type of auction is understandably of most interest to bidders, and observers, because they create more excitement and participation. This benefits the people selling real estate too, by drawing more prospective buyers to the auction.
Often, during minimum bid and reserve real estate auctions, the seller will signal the auctioneer that the minimum bid and it then becomes an absolute auction. When the auctioneer then publicly announces that the auction has become absolute, the excitement in the room increases considerably. I witnessed this myself when I attended my first real estate, which OwnACondo.com held in November. Whenever auctioneer Vinnie Zaffarano announced that the reserve auction had become absolute on a particular condo sale, everyone in the room perked up and the excitement grew. I have seen it time and again at vehicle auctions also, with the atmosphere becoming almost electric as the bids keep increasing to the rhythmic call of the auctioneer. After all, these are the types of auctions people are most familiar with, from seeing them on TV if they haven’t actually seen them in person.
Auctioneers, or any real estate broker conducting an auction, will encourage those listing property to take a chance and have their merchandise sold by absolute auction from the beginning, just because the added interest from those buying real estate, or anything else for that matter, so often results in a higher selling price. This is true for Internet sites such as eBay, as well as brick-and-mortar auction houses such as RealEstateAuctions.com.
Auctions
You are ready to buy a home! How exciting is that! An auction may be a great way to get your price and reduce the time and red tape of a traditional home purchase. Can you imagine moving into your new home in as little as 30 days. It can happen and we are going to give you a road map on how to do it.
I know your first question. How does an auction work? You have seen auctions on TV or may have even participated in an Ebay auction for smaller items but auctions all work basically the same way. The properties we make available to you are obtained from private sellers, banks or developers and most importantly to you are free and clear to close the day of the auction. That’s how you can close in so little time!
Picture this! You are in a room filled with people and the excitement is like an electric charge throughout the room. The auctioneer calls up the first property to be sold. Everyone is on the edge of their seats waiting to see what is about to happen. It is an absolute bid property which means no matter the final price the property is sold when the gavel goes down. Everyone is in anticipation of what the property will sell for and who walks away as the winning bidder. Only registered bidders with paddles can bid so don’t worry about scratching you ear or blinking – that only happens in the movies. If you want to bid, raise your paddle and the bid assistants in the room will help you through the process, making certain you know the current bid and that the auctioneer has acknowledged your price. But the auction is not over by any means because the auctioneer has not declared the item sold until the gavel goes down and bidding is closed. The auctioneer calls for the final bid, there is a silence in the room, finally the gavel goes down and applause and congratulations fill the room. You are now the proud owner of your new home!!!
Auctions are thrilling! There is anticipation, excitement and reward for the winner bidders. They got a great deal on the home they want and best of all you will know in just a few minutes the home is yours and you will be moving in less than a month.
How exciting is that!!!