Is an Auction a Good Deal?

By
Real Estate Agent with Realty Executives Premiere

Many buyers have the notion that buying a home at auction (not sheriff sale) will bring them a rock -bottom price. What they don't realize is that an auction is just a marketing technique used by  some agents to initiate a sale. The agent lists the property with an auction company but there is a reserve price requirement that must be met before the property can be sold. So if you thought you could bid $10,000 and win the auction if nobody else bids, think again. The reserve price is usually close to market value. There are usually fees that the buyer must pay to the auction company. In many instances an auction is no better value than buying a bank owned property outright.

Posted by

Diane Lynch

Realty Executives Premiere

Wheaton, IL

Comments (6)

Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

The idea of the Auction is to have everyone emotional and over bidding on the property.

Jan 14, 2011 05:27 PM
Diane Lynch
Realty Executives Premiere - Warrenville, IL
Real Estate Broker

Tim, you are right....people want to win the bid. It's human nature! Thanks for the comment.

Jan 14, 2011 05:31 PM
Tommy Taylor
Taylor Properties & TexasForSale.net - Kerrville, TX
CNE- Texas Hill Country Realtor

With the slow market, most auctions are not bringing market values but  the sellers are willing to make a trade off to have the property sold within a certain time frame.

Jan 14, 2011 05:32 PM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Properties will also move from auction company to auction company if they don't get the price they want to get for it. We have one here that is now at its third one.

Jan 14, 2011 06:31 PM
Diane Lynch
Realty Executives Premiere - Warrenville, IL
Real Estate Broker

Tommy - I agree the auction is supposed to bring a quick sale....doesn't always work that way though. Lots of properties with no bids....

Hella - wow, 3 times and you're out...guess that's not working well.

Jan 15, 2011 04:11 PM
Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!

Diane Lynch

I think auctions area pretty good thing. I have seen them bring in good revenue are on to sell properties

Jan 02, 2015 11:15 PM