Traditionally, the buyer satisfies this need by negotiating with the seller to reduce the price. But, we all know that getting a buyer or seller to act is a difficult thing to accomplish. With an auction, the buyer can only win if he or she out bids the other bidders, right now.
Auctions accelerate the process of selling any property by compressing the marketing period. It brings together all interested parties at the same time to complete the sale. Offers and counter-offers, and the frustrating, slow negotiation process are swiftly turned into an exciting, urgent bidding match by serious prospective buyers. Auctions bring all interested parties into one place at the same time for the single purpose of determining who will pay the most for the property. Excitement and motivation are present at auctions. Auctioneers apply continuous motivational pressure to gain every dollar available.
This sense of excitement works to create the psychology of an impending sale. Consequently, all interested parties are compelled to make a decision, and make it now.
The terms of the auction are set by the seller. All buyers bid based on a common set of terms and conditions. The seller remains in the driver's seat throughout the process.
When the sale is over, there will be a signed contract to purchase with a deposit check, and the closing will be set for 30 to 45 days or less from the auction date. The simple principle of the time value of money ("time is money"), dictates that a thousand dollars received today is worth more than the same thousand dollars received next year. Also, auctions can increase a sellers liquidity and reduce holding costs significantly by quickly terminating on-going expenditures such as interest, taxes, insurance and maintenance.
Auctions can also effectively control the costs of promotion and advertising of the property. It is no secret that there is a certain amount of the price of a property that must be set aside for advertising and promotion if an effective sale is to be achieved. Because an auction can effectively determine when a property will sell (date of the auction), a seller can afford to effectively attack the marketplace. By using signage, print media, the internet, TV, radio and direct mail, a media blitz can be developed that will target a multitude of prospective buyers. A well advertised auction can pull more prospective buyers in to inspect a property in a short period of time (urgency) than a conventional listing period that too often extends to a year ... or even more. Consider traditional methods. If the system is not working why do things the same way? If you have time to wait and you don't have to sell your home, the traditional method is for you. If you need to sell quickly and need to generate as much interest in your property in the shortest amount of time, THIS IS FOR YOU.