- Citigroup Gets Burned in the Caribbean September 3, 2010The bank is selling its mortgage on the Viceroy Anguilla to Starwood Capital Group at a hefty discount, the latest example of capitulation by a bank that has nursed a troubled real-estate project for years. […]
- New Resorts Owners Roll Dice September 1, 2010Morris Bailey and Dennis Gomes are paying $35 million for Resorts Atlantic City, at a time when gambling revenue is declining and customers are being siphoned off to Pennsylvania venues. […]
- Capital Freeze Thaws for Real-Estate Funds September 1, 2010Real-estate funds saddled with boom-time properties are getting relief from Wall Street firms and other investors hoping to capitalize on their need for cash. […]
- Corio's Turkish Strategy Stumbles September 1, 2010The Dutch company's expansion has yielded disappointing results due to the weak economy, competition and the difficulties of exporting Western shopping concepts to a country steeped in different traditions. […]
Archive for the ‘types of auctions’ Category
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.