Posted By:Infra Bazaar
A real estate auction is a great innovation which is also a very effective method of selling real estate. It is an accelerated and intense real estate marketing process that involves the public sale of any property that can legally go up on sale. These properties open the doors for competitive bidding, through open cry.
To learn about real time auctions, let's broadly discuss, the three most popular kind of auctions:
Absolute Auction (or auction without reserve)
In this kind of auction, the property’s ownership is handed over to the highest bidder, regardless of the property's original price.
Since, this kind of a sale means almost guaranteed results, excitement and participation of the buyers is heightened.
These types of auctions usually generate maximum response from the marketplace.
Many sellers, including financial institutions and government agencies have started relying on this method more often.
Minimum Bid Auction
In this kind of auctioning, the auctioneer announces that he/she will accept bids at or above a certain published minimum price. This benchmark that is drawn as a minimum price is always stated in all branding or advertising materials, and is yet again announced at the auction venue.
This makes lives easier for bidders, as it reduces the risk of the sellers as they know that their sale price has to be above a certain minimum acceptable level.
Buyers know they will be able to buy at or above the minimum.
The seller may, however, limit interest in the auction to only those buyers willing to pay the minimum bid price, and therefore it must be low enough to act as an inducement rather than a hindrance.
Reserve Auction (an auction subject to confirmation)
In this scenario, the highest bid is reduced, in effect to an offer not a sale. In this kind of auction, a minimum bid is not declared, thus reserving the seller's right to reject or accept the highest bid, but within a specified time. This time could range between, ‘immediately following the auction up to 48 or 72 hours after the auction concludes’. Usually, sellers predetermine the price at which they intend to sell the property and are not necessarily obligated to confirm a sale, at any other price than that, which is acceptable to them, in its entirety. The main challenge of a Reserve Auction is that prospective buyers may not be willing to invest the time and expenses needed for due diligence, as there is no certainty of whether they will be able to buy the property, even if they are the highest bidder.
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