On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A noisy and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For a number of minutes the auctioneer wants the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer demands yet another bid. In a loud clear voice which rolls within the audience he says, "Fair warning, last chance" the auctioneer pauses, "SOLD!" And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the main one above are happening all over North America and the Caribbean. Recently real estate auctions have now been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing available on the market struggling to attract buyers even as seller's lower prices. Many say the real estate boom is finished but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Irrespective of trends or market cycles, real estate auctions offer an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the "wait and see" attitude which serves to further depress real estate values. Buyers are usually worried about overpaying. Buyers gain confidence with their purchases at real estate auctions because they could see what others are ready to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above just what a willing seller might have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at any given time, leave tens of thousands of dollars of equity on the table. During up markets real estate auctions are the simplest way to establish top market price.

Evaluating Your Real Estate for Auction

Don't assume all property or seller for that matter makes a great candidate for auction. To begin with sellers must certanly be ready to market now and for the present market value. Also a real estate auction will not fix problems the result of a downturn in market value of one's property, if you borrowed from greater than a willing buyer will probably pay, be prepared to come to closing along with your check book.

Properties that well in real estate auctions have a top uniqueness factor. Ask oneself, "What makes my property different from most others?" Maybe you own a resort property or top quality luxury home, commercial properties and land do well at auction. Property auctions thrive on uniqueness. If your property is much like everyone else's, a good thing you can do is offer probably the most competitive price.

Most of all sellers must certanly be reasonable about setting a minimum bid. A seller must go through the lowest, most current comps and price below that to generate the interest and urgency essential for an effective real estate auction. When the auction begins and qualified bidders start competing against one another you are able to watch the selling price increase.


Published by Matthew Piggot