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If they have equity, they will find out what current buyers are willing to pay. Plus, sellers pay no commission at auction. The hype can get out of hand at auctions, and buyers pay more than they planned to, and some buyers forget they have to add a 6-10% buyers premium to winning bid. It's case by case. Some properties are good candidates for auction.
White Plains, NY
Troy Erickson AZ Realt...
Sarah - I think Jeff made some excellent points. Auction can help sellers get their home a guaranteed sale quickly, and sometimes for more money. I don't think buyers realize that they have to pay a premium as the winning bidder. Plus, it never crossed my mind that the seller pays no commission, but that is a good point as well.
White Plains, NY
Bidding frenzy often generates higher prices.
Last year, the local KW were trying almost every their listing via auctions. It was kind of annoying, since they had these rules of creating 'urgency' and ''excitement''. But since many listings were not getting any results, I believe they abandoned auctions, at least, I do not see them any more. We still have some online and trustee auctions, but only for distressed sales.
Sarah Cole An auction is a good option for a quick sale or for a property that may not be selling. Most auction houses want up front fees for advertising, etc. A lot of sellers are not willing or can't pay these fees.
To get the property out of their names immediately.
I recently had a seller who wanted to be list their home for auction as regular sale. I tried my best to explain how this won't help and it can hurt ..at the end of the conversation I agreed to ride along.
All the calls I received were with low ball offers and prospects thought we were distress sale. It negatively impacted the home even though it received more exposure. At the end it sold as a regular sale from our MLS listing.
There are Reserve Auctions and Absolute Auctions. Reserve is where the seller reserves the right to accept or reject the highest bidder. Absolute auctions are guaranteed sale to the highest bidder. I don't like auctions because their contracts are one sided, the premiums they charge the buyer, and commissions they pay the agents. Also many Auctioneers do not have real estate brokers licenses.
Thank you for the question and the link. I have not seen much of it in my market area.
Because someone talked them into it.
Personally, I think the auction buyers are mostly looking to steal a property and not pay fair market value.
I have seen folks get in a bidding war at an auction. Folks hate to see others get a deal.
Not many do in my market. Perhaps those who do choose an auction think they will get more money in the moment.
Sarah Cole - beats me!
I would not want an auction sale for a regular sale.
For the speed of it or less hassle. They want a sure sale and want to be done with it in 30 days or less. Absolute auctions work that way.
They think they can make more money on the sale, which is not necessarily true. Auctions can create a sale faster that a regular listing, depending on the price of the listing and the condition of the property. Of course the location could also be a factor.
The primary benefit is a fast transaction.
An auction can move the process along far more quickly than putting it on the mls.
Sarah, some sellers think buyers will be more interested a property in auction.
The perception of a potentially good deal.