Online Real Estate Auctions rules of Buyer's Premium
In the early 1990's the use of the buyers premium became increasingly supportive and used in real estate auctions in selling personal property. Rapidly in the past decade the use of the buyers premium has been used in real estate transactions to enhance the seller's. Much discussion has taken place about its use and how a buyers premium applies to transaction that involves the selling of real property as well as personal property. In my opinion and based on facts of many auctions, I feel strongly that a buyers premium will yield a greater amount that a seller will receive.
Below is an example of how the buyers premium is calculated:
Bid Price 1,000.00
10% BP +100.00
________________
Total Contract = 1,100.00
Online real estate auctions have also adopted the use of the buyers premium. Be sure to carefully read all the terms and conditions of the auction. The terms and the amount of the buyers premium should be posted as required by most states.
Many people are interested in real estate auctions, but may not know or understand the auction business and how to participate in real estate auctions. By posting definitions and examples I hope to give a better understanding of real estate auctions terms. These terms are direct definitions given by NAA (National Auctioneers Association).
Buyer's Premium
An advertised percentage of the high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.
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