How Do Auctions Work
In some cases, auctions offer not only an alternative to standard real estate sales, but also a real advantage. Here are a few of the ‘auction advantages’ that can play a role in a potential sale:
- CONTROL OF TERMS
Auction terms and conditions are established by the seller with suggestions from the auction manager. After the terms are established, all buyers follow the same pre-determined rules, keeping a sense of control squarely on the seller’s side of the table.
- CREATES URGENCY
The property is presented at a set date and time, allowing you to know exactly what day the offers will be presented. This, in turn, creates a sense of urgency felt by the potential buyers, forcing them to act—or miss the opportunity.
- BUYER COMPETITION
In the traditional real estate sales process, the buyer negotiates with the seller. The seller has an asking price and the buyer offers something lower, and on it goes. With auctions, the buyer competes against other buyers until the final best offer is presented, a clear advantage to the seller.
- NO CONTINGENCIES
Unlike a traditional real estate transaction, you will not receive offers contingent on a buyer getting financing or selling another property. The offers presented on auction day are cash offers.
- SET CLOSING PERIODS
Closing usually takes place approximately 30 days following the auction, which allows the seller to know when cash will become available.