Strategic Auction Alliance Blog

Advantages of Selling Real Estate at Auction

  

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Frequently we are asked: "Why would someone consider selling their real property at auction?" Listed below are few advantageous reasons for doing so:

• Time value of money. A majority of the time the owner has plans for the proceeds following the sale of the property, the longer it takes to sell the property the longer those plans must wait. An auction can determine the date the property will sell allowing the owner to go forward with those plans. A property sold quickly at auction avoids long term holding costs and declining market conditions.
  
  
• Sale contingencies are determined by the seller. Frequently after lengthy negotiations a deal will fall apart due to a contingency of sale that the buyer and seller cannot resolve. In an auction transaction the terms of sale are predetermined and are only as negotiable as the seller stipulates. It is true that the stricter the terms the fewer buyers may be qualified to participate so a balance must established however auction transactions typically successfully close.To learn more about selling at auction visit our Auction 101 page.

• Market is revealed. An auction sale forces the market to react when potential buyers bid competitively in ascending increments until the party who will pay the most for the property within the set terms of that transaction on that date is determined. To learn more about buying at auction visit our Auction 101 page.

Some situations where auctions are a practical mechanism of sale are commercial real estate exchange, cash flow or capitalization problems, or what about a distressed property where the owner hasn't the desire or means to improve the property to make it attractive for traditional marketing. For more information please visit the real estate auction pages of our website.