Real estate auctions have gained popularity as sellers seek fast and cost effective ways to sell their properties. Financial institutions and contractors prefer auctions because they do not have to spend several years or months trying to sell a particular number of units. Auctions allow sellers to get immediate cash while buyers get properties at fair prices based on competitive bidding. Auctioneers apply a variety of techniques to sell houses. The techniques applied differ depending on the state and the seller’s requirements. Auction laws tend to vary from one state to another and this will influence the approach an auctioneer applies to sell a property. The auctioneer has to inform buyers about the specific laws that apply in a particular state before they commence the auction.
Without Reserve or Absolute
In this selling technique, an auctioneer will not provide a minimum bid. When an auctioneer uses the without reserve technique, the seller has to sell their property to the highest bidder in spite of price offered.
Disclosed Reserve or Minimum Bid
In this case, an auctioneer will disclose a minimum bid. This commits a seller to offer their property to the highest bidder who offers the minimum bid or more. An auctioneer will request for an opening bid. They will also set an amount by which every bid must rise. This can be $1000 or $5000 increments. The increments are usually determined by the auctioneer.
When the reserve is reached, a property is considered to be available and it has to be sold. In situations where the reserve has not been reached, the auctioneer will ask a seller if they want to reduce the price.
When an auctioneer uses the with reserve option, the seller can either accept or decline the highest bid.
How to Get More Bids
To increase bids at a real estate auction, sellers should have realistic expectations. This means that they should ask for fair prices and offer their properties at the right time. It is also important to provide desirable properties if you want to increase bids. A property is considered desirable if it is in the right location and condition. The surrounding environment can also affect a property’s value.
There are various auction methods that can be applied and it is important to select an appropriate one for the seller’s requirements and specific property being offered for sale.
Marketing is essential if you want to get more bids. Aggressive advertising will ensure that all potential buyers are well targeted and made aware of the available properties. You have to identify the kind of buyers that you want for your property. Provide all the due diligence details to the potential buyers before the auction. The law requires real estate agents to display documentation for the property going on sale.
It is also vital to identify a professional auctioneer to sell your property. The auctioneer should be able to conduct the auction professionally and follow-up until the deal is closed.
Properties have to be prepared for the auction to ensure it is presented to potential buyers in great condition if a real estate agent wants to get more bids.