Absolute Auction
Two huge benefits from this auction type: it will generate the strongest response from the marketplace, and the property will definitely be sold. Anyone who has used ebay.com is familiar with the absolute model: bidders from all over have the opportunity to place bids on the property within a set frame of time. At the end of that time, the house will be sold at the winning price. Bidding starts at zero and, theoretically, the property could sell for $1 since the winning buyer is contractually obligated to buy the property for the final price and the seller is obligated to sell at the winning price. In practice, as seller you would be unlikely employ this method unless you were certain that multiple buyers were ready to make reasonable bids.
Minimum bid
This type of auction is very popular for real estate auctions since it provides a baseline minimum that bidders must match or beat before their bid can be accepted. Of course this means response may be less enthusiastic than for an “absolute” auction, and there is no guarantee that the minimum bid will be met and that, therefore, the property will sell. So if you are serious about selling, set a low minimum bid; advertise this low-ball prices wherever you list your Open House and you are sure to attract many to view the potential bargain.
Reserve
Want to keep your options open and rethink whether you wish to close the deal once the auction is over? Consider this auction type. It is more difficult to entice bidders since they know that winning the auction at a bargain price will probably result in the seller refusing to sell. You might steer more interest towards your reserve auction with a low starting bid -- bidders may access public records on the property you’re selling and see how much is owed on this property; start bidding at or just above that amount and potential buyers will realize you actually may sell at this price. (Of course, the property should qualify for an auction sale, which means that the property should have equity 25-30%, allowing the starting bid to be 25-30% below the market value.)
Broker/Owner/Real Estate Auctioneer
Continental Realty Inc.
16 Crow Canyon Court Suite 100
San Ramon CA 94583
DRE# 01422589
925-548-5461
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