How to Move Properties Fast with Auctions : “How To” Real Estate Investing Class
Tired of watching your properties sit on the market month after month after month with no real offers? Would you rather sell your properties in a few days instead of a few months? Well, to get a different result we must apply a different strategy. Auctions are a great way to get properties sold in a hurry!
But remember, not all auctions are created equal. There are few different types of auctions you should be familiar with.
We have “Absolute” auctions which are exactly what they sound like. That means that no matter what, that property is going to sell for something at that auction…even if it’s one dollar! This type of auction creates the exact environment you are looking for as a seller. They’ll be many buyers showing up to salivate over your property and compete with one another! Sound good? This type of auction generally brings the most people to the event because everybody is looking for a deal and they know that once that bidding starts, there is no turning back for the seller. The best part is, if you’ve done your marketing right (which is vitally important), the property usually sells for close to appraisal and sometimes above appraisal.
Also, there are auctions that start with a “reserve” price. This is different than the “opening bid” or “Starting bid.” This means that the bidding has to get up to a certain number for the transaction to go through. Let’s say you have a property that you’re auctioning that appraises for $100k, and you know that you have to get at least $60k for it to let the transaction go through. You could set a “Reserve” for $60k and if the bidding comes in at $59,999 then it’s no deal. Anything above $60k will trigger the auction to then be absolute in nature. Pricing the property with a reserve of $60k still gets people interested in showing up and bidding while giving the seller the security of knowing that it won’t sell for less than the reserve.
Where else can you create an environment of extreme competition among pre-qualified motivated buyers who are willing to put a no contingencies contract on your property that day and pay all the commission? Exactly!
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Patrick Riddle:
Dusty Keefe:
In the last year, I have noticed several signs like the one in your picture. Auctions seem like they are becoming more popular but I haven’t ever tried one before.
Thanks for the advice!
I have not held an auction of my own but I did help another investor with one a few years ago. They had cars, boats, antiques and furniture at the auction as well as the home. It seems like auctioning other goods in addition to the home helps bring traffic and create excitement.
Great information on a timely subject
Wil
At a seminar that several years ago, one of the speakers specialties was auctions. He said that auctions are the primary way houses are sold in Australia and that it was only a matter of time before the United States caught up.
He said that ultimately, properties are sold for the highest amount possible, quickly and effectively.
Today’s market is fueling a drive to look for alternative sellers methods. We’ll see how far it goes.