Auctions are quite a common phenomenon when it comes to selling art and antiques, which has also quickly made its way into the real estate industry. However, before you indulge in an real estate auction, it is very important that you understand the many varieties there are and its important features. There are mainly four kinds of auctions, each perfect for a particular type of good and objectives that the auctioneer might have in mind. When compared to private negotiations, it has been seen that real estate auctions can offer higher prices for the same property in good condition. It could be said that a real estate auction creates the right incentives for sellers and buyers alike in a vibrant market. However, the opposite is true in a declining market or when it comes to distressed properties.
When it comes to real estate auctions, you can find a number of definitions in the industry, including,
i. A specific arrangement by which potential real estate buyers and seller compete for the right to buy or sell a service or good.
ii. A sales event in which a number of bids are placed for the rights to the same good or service by various buyers, in an open or closed format.
Much like in all other types of industries, auctions have a number of important uses when it comes to real estate. Further mentioned below you will find some of the same.
1. If you have a property in a booming market and do not want to sit with every client to negotiate, you can call for an auction. Not only will it ensure that you consult with all potential buyers at once, but it will also help you make the most of your sale.
2. Since all buyers are together watching the next bid in front of them, an auction quite un-seemingly increases the price of your property. While in negotiations, increasing your selling price requires both time and planning, auctions are different. Here, whoever wants the property more will place a higher bid, further increasing your property’s price without you even trying.
3. You can easily reach a larger audience group with auctions. There are always certain potential buyers that you have not come across. However, they always keep a tab on what is happening in the market. So if you book a hall for a real estate auction, they will know right away and take part in the auction, further heightening your chances of getting a better price.
