How Auctions work

While conventional methods of selling real estate continue to dominate the national market, auctions are quickly growing in popularity. The stigma that real estate auctions are only for "distressed" property sales is changing as more and more real estate sells at auction, at top market prices! A good auction opportunity exists when a seller is auction-minded, with the confidence that their property will bring a fair market price. A good auction opportunity also exists when the real estate market and/or buyers are changing, where there is a limited supply of a particular property type with strong buyer demand (i.e. ocean-front property) or there is a flat or declining market with little buyer interest for conventional property sales. Offering a property at auction creates a sense of urgency, bringing all interested parties together on one specified day. And this process of selling a property establishes its own sales price through competitive bidding. All property sold at auction is sold as-is, where-is on the sale day, with buyers questions answered from disclosures and reports provided prior to the sale. On the sale day, the property is sold with no contingencies, to a buyer who is pre-registered and pre-qualified...with certified funds for deposit in hand!

How Auctions work for Buyers

Buyers benefit from auctions. The winning bid is typically at or below the market value, and the purchase price is set by the buyer. Negotiations are minimal, and the purchase time is also reduced. The pre-auction materials are made available to all bidders, so potential buyers are all viewed equally. Finally, the closing date is known in advance.

How Auctions work for Sellers

Sellers have distinct advantages when it comes to real estate auctions. When the property is sold, the buyer has committed to buy. In fact, those attending real estate auctions generally are interested in buying the property, so the audience of bidders can be seen as an audience of buyers. In order to bid, these potential buyers must have proof of funds by pre-qualification or pre-approval for financing. In addition, selling by auction results in a quick sale, which can reduce many financial obligations, including maintenance and taxes. And finally, the seller eliminates the need for showings and appointments

How Auctions work for Real Estate

One of three types of auctions may be used to sell real estate. The absolute auction ignores final price, selling to the bidder offering the highest offer. The sale is guaranteed at an absolute auction, so crowds are usually larger and more enthusiastic. The second type of auction uses the minimum bid, which sets an established and published price. This amount is publicized through advertising and at the event. Because the minimum bid is already set, the seller assumes less risk. The third type is the reserve auction, which allows the seller to reject or to accept the offer. The time frame may be within a set number of hours or days following the auction. The reserve auction allows the seller to be more in control of the final price. Delmarva Auction and Asset Management Company may hold an auction under contract with a real estate agent, bank, or the family overseeing a loved one's estate or a seller who needs to sell quickly.