Have any of you ever participated in a real estate auction? After recently reading about them and then briefly covering them in one of my ABR classes, I decided to place one of my hard-to-move properties up for auction. We did get a buyer, although at a markedly lower price than what we wanted. The neat thing about it is that the seller retained control and decided whether to honor the bid or not. (Of course, this was a multiple-property auction, and the listing was taken this way. There are absolute auctions in which the seller must accept the highest bid, so caution must be exercised.) As an added incentive, the seller did not pay the commission--the buyer did! So, there was no risk to the seller at all, and less money up front could be accepted. Buyers must be pre-approved and immediately deposit $2,500 earnest money per property being acquired. Closing must take place within thirty days.
This is also a great venue for investors to acquire rental properties. One of the local banks listed quite a few reposessed properties in the auction. All sold, with the least expensive going for under $10,000. Quite a few sold in the $20,000 range, and some sold for $40,000 and $50,000. In each case, the last known appraised value was given, and title is guaranteed. In fact, the bank withdrew several properties at the last minute when title problems were identified. After being cleared, the properties will be relisted for auction at a later date.
It was a very interesting experience to say the least! I don't know if auctions in other areas operate in exactly the same manner, but I expect they are similar. A local auctioneer who has received national awards conducted this auction.
Please share any similar experiences.