Paul's Appraisal Blog

Home Auctions Quickly Get Foreclosed Homes Off the Market
November 28th, 2007 5:45 AM

Going Once… Going Twice…
Home Auctions Quickly Get Foreclosed Homes Off the Market

Any seasoned salesperson can tell you that waiting for a buyer to make the first move is an ineffective marketing tactic, especially when pertaining to the real estate industry. Instead of sitting back and waiting for a sale to come their way, homeowners are utilizing alternative property marketing methods.

Over the last few years, real estate auctions have become a popular way to market everything from newly constructed condominiums in an over-built market, to single family homes that have been on the market for several months and are in danger of foreclosure. Real auctions not only produce plenty of buyer interest and traffic, they also attract serious buyers. Due to the connotation of the word “auction”, buyers rightfully assume they will find significantly discounted homes and great homebuyer bargains.

Before the Real Estate Auction Tips
Before you raise that auction paddle or settle on placing your property on the auction block, it is important know home auction basics. Below are a few auction tips and financial factors to consider when discerning whether or not home auctions are the solution to your buying and/or selling needs.

Both Buyers & Sellers Should Know the Rules
Is the auction you are overseeing or attending an Absolute Auction, Minimum Bid Auction or a Reserve Auction? It is important to know auction details and rules so you can be prepared to make an educated bid or a quick home sale.

Absolute Auctions are the most buyer-friendly. The absolute auction seller agrees to sell the home to the buyer with the highest bid, regardless of the final price. Since a sale is guaranteed, absolute auctions generate the most buyer excitement and participation.

Minimum Bid Auctions involve the seller agreeing to a minimum selling price, which is normally advertised before the auction. This not only reduces the sellers' risk, but also provides more control over who is permitted to bid at the auction.

Unlike Absolute and Minimum Bid Auctions, Reserve Auctions do not result in an immediate sale. Instead, the seller has the right to accept or decline any bid within a specified period of time. Reserve Auctions are commonly used with court-ordered sales where a price must be sanctioned before closing.

Buyers, Get Pre-Qualified
Avoid buyer's remorse by ensuring you are capable of taking on the financial responsibilities of a new home. Most lenders are dedicated to providing you with practical mortgage product information and loan financing tools to guide your search for a loan program that is appropriate for your situation.

Buyers, Schedule a Post-Auction Meeting with Your Broker
Most auctions require you to gain approval for a loan within a specified escrow time-frame. Failure to get approved for a loan in a timely fashion can result in liquidated damages. Be sure you contact your lender to meet after the auction so that you can obtain your loan within the seller's brief time frame.

(From an email received from Earth Mortgage: )

Posted in:General
Posted by Paul McEwen on November 28th, 2007 5:45 AMPost a Comment

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