The popularity of real estate auctions has increased significantly in recent years, and for the most part, it has been under the radar in terms of public knowledge.
The National Association of Auctioneers (NAA) has understandably got its finger on the pulse of real estate auctions. According to the NAA, almost $59 billion in real estate sold via auction in 2008, with an even higher amount expected for 2009 once the year-end totals are in. Those are impressive numbers.
In fact, the NAA estimates that 30 to 35 percent of all real estate will be sold via auction within the next five years. By anyone’s reckoning, that’s an awful lot of real estate.
Why are real estate auctions increasing in popularity? Several reasons:
1. Online merchandise auction sites, such as e-bay, have introduced huge segments of the public to the auction concept.
2. Auctions are no longer thought of only as a vehicle for distressed products
3. A difficult economy has sellers looking for alternative ways to market their properties and attract buyers when traditional real estate methods are taking too long
4. Buyers and sellers are realizing auctions are a method that’s typically faster and easier to transact business
5. Buyers and sellers understand that auctions are really the best way to determine exactly what any real estate is worth, right now. Not last month, not last year, but in a head-to-head, open-outcry forum.
RealEstateAuctions.com recognizes the value of auctions to buyers and sellers and is committed to bring the very best properties to the table for these exciting events.
There are three types of auctions that are typically part of any event held by RealEstateAuctions.com: Absolutete, Minimum Bid and Reserve. Here’s how they work:
Absolute Auction: This is the textbook type of auction, the kind most people think of. The highest bidder wins the property. Properties that are sold “absolute” invariably get the most attention from the buyers. As they bidding notches up, bit by bit, each bidder knows that if he or she just goes a little higher, the property could be theirs. But of course, every other bidder in the room is thinking the same! Absolute auctions auctions are typically the most exciting, the most well-attended and have the most competition.
Minimum Bid Auction: The seller sets a minimum price at which bidding must start. This offers the seller protection that the property won’t be sold beneath what he or she can live with, but this strategy also runs the risk of having little or even no participation if bidders feel the minimum bid is set too high.
Reserve Auction: The seller may accept, reject or counter the highest bid for any reason, and usually has within three days to do so. Like the Minimum Bid Auction, the Reserve Auction offers the seller a lot of proptection, but also tends to draw less interest from bidders.
