- 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. […]
Posts Tagged ‘sell a condo’
Reverse Auctions
Reverse auctions
The popularity of reverse auctions in recent years has increased, as auctions in general are becoming the preferred way of buying real estate and goods of all kinds.
As the name suggests, reverse auctions are those transactions in which the roles of buyers and sellers are reversed. In a traditional auction, also called a forward auction, buyers vie to obtain a property or service, with the selling price increasing as the buyers keep raising their bids in an effort to outlast each other. But in a reverse auction, just the opposite happens, with buyers requesting what they need, and the most they are willing to spend. Sellers then compete to undercut each other and to obtain the contract or sell/rent their condo or other property by reducing the price as low as possible.
Almost anything, including condos and cars are sold on eBay, the most well-known Internet auction site, and helped to popularize online, traditional auctions. And now reverse-auction Web sites are also becoming more common
Very often, it is goods or services being procured in the reverse auctions, but people looking for condos and other real estate can get good deals this way also.
When engaging in a reverse auction, participants seeking property or services are advised to determine first how much they are willing to spend. They then post their needs on the Web site, and how much they can afford to pay. They can then sit back and watch as sellers compete to get their business.
Reverse real estate auctions are increasingly being employed to buy or sell property, especially in markets with a glut of available properties and people just need to sell them, even at a loss. For instance, in Congressional testimony on the 2008 proposed legislative package to use federal funds to buy toxic assets from troubled financial firms, Federal Reserve chairman Ben Bernanke proposed using reverse auctions to price the assets. Like many other auctions these days, real estate and otherwise, reverse auctions are often done online. A prospective buyer posts a “request for quotation (RFQ)” to purchase a particular item. With real estate, this can be as simple as “I need to rent a condo, or buy a condo in Miami, and at most I can pay this amount.” Then people trying to sell or lease condos will compete to match that price or come in at a lower figure.
Reverse auctions are usually held in real-time to inspire dynamic bidding, usually resulting in rapid downward price pressure that would not be attainable otherwise.