- WTC Development Talks Continue March 11, 2010Negotiations continued between developer Larry Silverstein and the Port Authority who are trying to resolve an impasse over the redevelopment of the World Trade Center site before a critical deadline Friday. […]
- Fortis Sues Lender Kennedy in Debt Case March 11, 2010Kennedy Funding, a New Jersey lender to cash-strapped real-estate developers, has plenty of experience going after debtors who fall behind on their payments. But now it's Kennedy's turn to get squeezed. […]
- Helmsley Estate Sells Manhattan Hotel March 10, 2010The Helmsley Carlton House is being sold to a partnership between private-equity firm Angelo, Gordon & Co. and Extell Development for about $170 million. […]
- General Growth Debt Bet Pays Off March 10, 2010A handful of investors dug to the bottom of the discount bin and snapped up General Growth's convertible bonds at three cents on the dollar. They now trade at 103 cents. […]
- European REIT Rollout at Hand March 10, 2010With European property markets beginning to recover from the market downturn and global recession, there are signs that the REIT revolution could be at hand. […]
events
APARTMENT BUILDING AUCTION
The featured inventory will be starting at low Min. Bids.
March 27, 2010 at Chicago Marriott OAK BROOK
AUCTION SEMINARS
Learn how to sell and buy at real estate auctions.
OPEN HOUSES
Inspect the properties prior to the auction.
Archive for February 3rd, 2010
Auctions
With the ever changing real estate market a centuries old process of buying and selling has resurfaced. Buying at Auctions are becoming one of the most attractive ways to buy real estate no matter if it is your primary residence, vacation home, or investment property. To many people in Chicago a real estate auction is foreign to their way of thinking regarding the purchase of their condo or home, but auctions have long been the primary means of buying real estate in other parts of the country, particularly the south. Auctions are the relatively simple process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the winning bidder. The definition above is the basic auction form but there are several variations, including time limits, minimum or maximum limits on bid prices, and special rules for determining the winning bidder or sale price. Many times the participants may or may not know the identities or actions of the other bidders and they can participate in a variety of ways, such as by telephone, or internet.
Essentially there are three types of auctions. An absolute auction, or an auction without a reserve where the subject property is sold to the highest bidder regardless of the amount of the winning bid. Since the sale is guaranteed regardless of price buyer excitement and participation is heightened. This type of auction generates maximum response from the market, thereby ensuring attaining true market value.
Minimum bid auction where an auctioneer accepts bids at or over a published price is the next type of auction. For sellers it reduces the risk of the subject property being sold less than what the seller is willing to take or the property does not sell. For buyers they know at what price the property will ultimately sell, minimum bid or possibly higher. The key here is for the seller to set the minimum bid low enough to attract the interest of buyers but not too low to sell below market value.
The last type of auction is the reserve auction. In simple terms with a reserve auction the high bid is reduced to an offer not a sale. The seller reserves the right to accept or reject the highest bid within a specified period of time, usually 48 to 72 hours. The down side of this type of auction is many times prospective buyers will not invest their time and energy since there is no certainty they will be able to buy the property even if they are the highest bidder.
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