REAL ESTATE AUCTIONS [HOW THEY WORK].
A real estate auction is handled by a licensed auctioneer and is a process of transacting properties by offering it to bidders in the auction room. The auctioned property will be sold to highest bidder. So how does it work?
• Rules of engagement- The seller’s agent is required by law to show all the documents as regards the property at least 30 minutes before commencement. Auction laws usually differ between states.
• Opening bids: The auctioneer normally requests this, thereby setting an amount at which all other bids must rise.
• The property is said to be on the market immediately the target price has been achieved, and will subsequently be sold to the highest bidder. If the target price is not attained, the auctioneer will seek the seller’s opinion in private, whether to sell at a price below the market value.
• Once the property has been sold to the highest bidder, an immediate down payment is made by the buyer, which is usually 10% of the sales price. And the settlement is set by the seller mostly within the range of 1 – 3 months. The sales are marked complete when all the necessary documents have been signed by both parties, all relevant transfers made and the balance settled.
Disposing a real estate can be a frustrating process especially in the current dynamic economy. Property owners who want to have control over the selling process as well as buyers who are interested in buying authentic properties are provided with several unique benefits through auctioning. These include:
• It removes the seller from the negotiation process.
• Auction minimizes time spent on purchasing properties.
• The property owner knows with certainty when the property will sell.
• The purchase price is determined by the buyers.
• The sale is accelerated.
These factors are the obvious reason for the growing popularity of real estate auction. Whether you have tried it multiple times or a beginner, it is always wise to explore the real estate auction option.