In the United States today, there seems to be a massive surge in real estate auction popularity. Some people feel a real estate auction is a complex process but it is actually very simple to carry out. There are advantages for both the buyer and sell with this type of auction. Until a several years ago, if a homeowner defaulted on their payments and the house went into foreclosure the only way then to sell it was through the foreclosure sale. It was a lengthy process. There was a big commission of approximately ten percent of the home’s value went to the real estate agent who conducted the sale.
Reasons that a seller finds real estate auctions useful include:
- The auction process is quick.
- The homeowner who is selling the property can set a minimum price they expect for the home and invite bids on the home. Most of the time you will be presented with a price that is much greater than what you expected
- The sales commission that the real estate agent receives is lower and they do not need to be paid to the real estate agents
- All the seller has to do is be present at the auction and at open houses.
The one buying the home also finds themselves with the same benefits with the major benefit of it can be completed quickly. Closing costs are also very low when getting a home or selling one at a real estate auction. The closing costs are usually shared equally between the seller and buyer so this will also reduce the amount you have to contribute to the sale of the home. One thing to note with real estate auctions is that you will normally not see extremely high bids.
Auction sales are listed under the category of As-is sales where to the seller knows that there is no risk with the buyers who are bidding on the homes for sale because there are no contingencies to be met in the future, and that the day of the auction the house will be sold. It is not the seller, but the buyer’s responsibility to make sure that the property is in good shape and if it is not it will also be their responsibility to know what, if any, repairs need to be made.
The buyer can inspect the property using the help of a specialist because if their bid is accepted they will have to make the payment quickly. The seller will normally demand a large deposit when a home is sold at the auction so the buyer has to have the deposit at least readily available and it is not refundable.
Image Source – davidackelauctions.com