Real Estate Auctions: The Basics
As we discussed last week, real estate auctions are expanding rapidly in this down market, as more and more citizens look to new ways of selling real estate.
But few understand the nuances. Before considering this option, it’s very important to note how much of a difference it can make in your efforts to sell a home. From the buyer’s angle, the money you can save could directly affect your mortgage costs, but only if you do it right. Below is a brief overview.
TYPES OF AUCTIONS
- Absolute: The property sells regardless of price. Often seen during home foreclosure proceedings. Sellers are often reluctant to participate in an absolute auction because they relinquish the right to reject an offer.
- Minimum-bid: The seller entertains offers above a certain price. Bids begin at the amount designated by the auctioneer, but the seller is still not obligated to sell to the winning bidder. In many cases, however, the price is set at a level the sellers would strongly consider accepting.
- Reserve: The seller accepts bids only if they’re above a secret minimum that the auctioneer doesn’t disclose to those bidding. So buyers can make an offer without any idea of whether it will actually be accepted.
COSTS OF AUCTIONS
- The seller pays: Advertising and marketing expenses.
- The buyer pays: A 10 percent “buyer’s premium” that’s added to the amount of the bid.
Definitely worth keeping in mind if you’re selling, as a real estate agent generally spends thousands of dollars marketing a home. If you’re going to go the auction route, it’s all going to be on you. As a buyer, you may be getting a good deal, but remember that extra 10 percent on top of the home price is significant.
January 15th, 2007 at 5:17 pm
Dear Mr Barber,
After reading your article about types of auction houses accepting “minimum bids” in secret communication process! I’m facinated about these home’s with assessed values being sold as some undislosed “secret minumum bids” action where the auction house sells homes [foreclosed] when prices are already assumed to be “priced” below the current market value! That anybody’s offer failes to be disclosed at the time the seller is accepting “bids” really facinates me. I need more information on making such bids myself.PLease help me discover these secret bids. Thank you.
How In reference to your opinion, where in reading your comments, about auction houses’ the percent they take , not all take 100% premimum, and regarding specific auctions where seller accepts secret bids, undisclosed prior to auction dates , I would like to know when is the “best time” to bid /discover these probable sales will be accepted ; and how one can get such a great home below the already reduced price? That’s such a delightfully splendid investment idea, a great financial “deal”, is as an investment generated where buyers immediately increase their own assets having more buying power and how can these auctioned homes sold be later on identified through such deal -making- secret offers? Do,they auction houses make this a public record documenting who determines these bids and offering buyers homes even at a lesser sale price by some particular value than what the be known criteria is used to accepting anyopne’s lower bid’ Auctioneers you write , which may or may not acceot your bid and we wouldn’t even know if it’s to be accepted. Why, I would like to know some facts: 1} How one can purchase homes through some auctioneer/agents by some secret undislosed “minimum bid”?
2] I would like to know how offers are handled and determined acceptable through what means are these sellers using some criteria , as such Real Estate Auction Houses, posting newspaper adveertisements in process accepting bids.,well before the auction date. That it’ intrigues me in knowing what you’ve identified !!. SO, Based on such facts offering money to any seller attending to some particular price, and which is way below the market values! Wow,I want to do this.
U certainly could help me. Oh if Please you could help me now find this “secret foreclosure process” on bidding or the proceedings where a home was identified below market price in Clinton Township Michigan, it’s going to go to auction on 01/21/07 That it’s already been apparently in process of sale by some auctioneer whose accepted 2 bids. I want to bid on the home by same “secret undislosed bids too.! How I saw it’s listed in the same way.exactly as you write in your article , yet the auction house asks for only a 5% above the sale price premium Why? Additionally please if you could give me more information., on this bid. How this process works really is a tool facinating many buyers like me. Making deals ON Such auction house actions being undislosed “lucracious” experience can offer me any opportunity! I would like more information on acquiring assets, as some 3000 sq ft home + other properties secretly offered by auction seller,
How are my bids going to be accepted prior to auction sales and on such secret foreclosed homes in the communities I live in officially in Oakland and/or Macomb County , Michigan. Perhaps I could make this my second job …,work with you indicated by finding the secret minimum bids here in Michigan . That since I’ve been a teacher and business owner for many years, after working as a teacher in Detroit Public schools well for 30 years ., by only that experience alone, I know I’d do very well making offers to sellers and prudently purchasing homes for others and than making a profit on this income gained from my sales of these be below by homes in foreclosure now or in the future. Please if you could reply to me making it by email write to:
allakopacz@comcast.net with your expertise comments on my proposal how one can see profits, finding that “secret minimum bid” even if it’s undislosed by the auctioneer !.
That I APPRECIATE HOW you again INFORM OTHERS and hope to hear from you at your earliest opportunity. **Certainly** would demonstrate my appreciation as your answer would be in what you require from me.
Alla
March 31st, 2008 at 8:16 pm
I currently live in San Antonio Tx. I have a home on 8 acres in the Richmond Michigan area I may want to auction off, could I please get a refered auctioneer?
Thanks Jon