When selling a house, people assume they have two options, sell it through a real estate agent or sell it themselves. There is a third option that is usually reserved for high-end homes or very low-end homes, and that is the home auction. An auction is just a quick way to market and sell your house within a certain period of time. Properties are often sold through auction because sellers don’t want to be continually hassled with buyers walking by their home and even going through their personal belongings; And no one wants unqualified buyers, who are just lookie lu’s, wasting the realtor’s and seller’s time.
There are two main types of auctions, Sealed Bid or Auction Outcry. Regardless of the type of auction, the Bidder or buyer and the Broker or agent qualify the buyer by completing an Auction registration form in advance. By completing these forms, they must disclose that the buyer is (1.) approved for a loan and (2.) if cash, the buyer has the funds in the bank. Potential buyers MUST register in advance.
An opening offer is advertised which is usually at the lower end of home value. Sometimes a seller will hold a reserve amount… that is, an amount he must meet before the seller must accept the offer. So the seller may decide to have an opening offer of $800,000 and a reserve amount of $1,000,000. Therefore, if the highest offer is $900,000, the seller does not have to accept it since it is lower than the reserve. However, the seller can choose to accept it, regardless of not attending the reservation. If an offer meets or exceeds the reserve amount, the seller is obligated to sell the home.
A sealed bid auction is one in which all qualified bidders submit their highest and best bids. All offers are sealed until a certain date and time when they are publicly opened. An Auction Outcry is a live auction, with a participating auctioneer moving through the process, beginning with the Opening Bid and ending with a winning or closing bid.
Whichever type of auction you choose, it’s a great way to speed up the entire process of selling your home.
