With the real estate market slow down, over 53,000 listings in the Arizona Multiple Listings Service as of today, and properties taking longer to sell, home owners who want to sell are looking at every possible means of snagging a buyer.
The new buzzword is “Real Estate Auction.”
February 24, 2007
Home sellers try unusual method with auctionsMisty Williams, Tribune
With the housing market lagging and homes taking months to sell, a Scottsdale-based company is betting homeowners will be eager to try a more unconventional route to successful sales — the auction.National Real Estate Auction Corp. will host a massive real estate auction in downtown Phoenix next month — offering everything from starter homes to multimillion-dollar estates.
Home auctions have been around for decades but have gained popularity as an alternative tool for selling in a slow market where competition is tough.
Valleywide, there are more than 45,000 properties on the market — at least 10,000 above the norm. Auction signs attract attention, said John McCann, one of the company’s founders. “It creates a lot of buzz and excitement about the property,†he said.
Real estate auctions are not new. In fact, this method of selling can be traced back to 500 B.C., and is as current as eBay. In a nutshell, an auction is a venue where buyers and sellers get together and goods are offered for bid and then sold to the highest bidder. If you remember Economics 101, an auction is a method for determining the value of a commodity that has undetermined or variable price. In other words, the buyers determine the value by the amount the highest bidder is willing to pay. I wonder if this is why people all of a sudden are thinking that buying or selling a home at auction is a good idea?
A local auction company, National Real Estate Auction Corp, says that buyers and sellers benefit equally from real estate transactions at auction. Buyers make deals at fair market value, avoid dealing with sellers who are hesitant, and don’t have to negotiate. Sellers are getting fair market value for their properties, properties close quickly with no contingencies, and the seller maintains control.
Their next auction is scheduled for Saturday, June 16, 2007, at 9:00 AM, at the Phoenix Airport Marriott. It will be interesting to see how many properties will be offered at auction, and how many will actually be sold and close escrow.
Auctions may not be for everyone, and you still need to understand the terms before you either buy or sell at auction. Still, in a tight market, it pays to look at all options.
Christoph is a licensed mortgage loan originator in the Greater Phoenix Metropolitan area.
Chris
This is an interesting way to sell properties. But what about the financing? Are these cash deals?
The properties which are entered into the auction are advertised on the website of National Real Estate Auction Corp. Owners and/or their agents are supposed to hold open houses in order for bidders to view the property and to do their due diligence prior to the day of auction.
In order to get in and bid, a deposit of $2,500.00 must be deposited with the auction. In order to participate in the bidding, the bidder must have a bank letter or verification of funds to pay cash. If the bidder intends to finance the property, the auction-house requires the bidder to be pre-qualified by their preferred lender prior to bidding. The bidder, however may choose another lender to close the transaction.
All contracts written at the auction will have no contingencies and all earnest money will be completely non-refundable to the bidder if the transaction cannot be closed.
There is to say, that it would be a good idea to seek representation when buying at the auction.
I haven’t tried the auction…yet. I did try a “one day sale”. We recieved a offer the day before,luckily. No one showed on the day of the actual sale. At least the buzz brought an offer!
More so than just live real estate auctions are online auctions where buyers aren’t pressured into a deal on the spot. By employing online auctions, sellers give their buyers a chance to discuss such an important financial decision with family, friends and lenders.
With your focus in Arizona real estate you might be interested in a current online auction I came across at Laughlin Ranch in Bullhead City.