For the most part, people have always talked about how property auctions are a good place for buyers to make the best acquisition deals. A lot of tips and tricks have also been written for them but how about the sellers? How do they benefit from it and what’s in it for them? Get to know the answers as you read along.
First things first, let’s introduce property auctions to those who are fairly new to it. By definition, it is an intense, accelerated, innovative and effective marketing method that involves the public sale of real estate assets, residential, commercial and industrial, through open cry, competitive bidding.
There are two main categories of sellers in a property auction, one that sells the property for profit and the other that does so in order to reimburse unpaid debt with a foreclosed property. Both receive similar benefits as follows.
- They get to take advantage of the market’s interest. For the buyers, auctions are one of the places where an asset may be bought for a cheaper price as compared to when the same is sold straight in the market place thus sale is always accelerated. This is why sellers are guaranteed that the bidders come with interest and the property sold fast.
- Buyers come with financing. It would be silly to bid and not have the resources to do so as most auctions require bidders to hand in a security deposit and even require pre-qualification financing. Moreover, an upfront payment may be required of the winning bidder and the remaining balance must be paid within the time frame given. This is why buyers already come with money in their pockets, figuratively and literally.
- You get rid of long term carrying costs. The longer a property remains unsold, the higher they cost you since taxes as well as repairs and maintenance can pile up. With an accelerated and quick sale, you get to cut these off early on.
- A return is guaranteed. As a seller, you can require a minimum or starting bid which can either be the exact market value on the property or higher than it to guarantee a return. Moreover with the competition among buyers especially with a good asset at stake, the amount can surge higher and higher.
Property auctions may not be familiar for everyone but with the benefits involved they are definitely worth considering.