“Most of the people will prefer the traditional way of shopping for a real estate property. Others will choose a different route- an auction. An auction may be a better option to get a good property at low cost.” said Dylan Gregore from One Percent Realty agency in Vancouver, British Columbia.
A real estate auction entails a public sale of residential property. Any auction causes tension, real estate auctions included. To minimize the stress associated with the sale, understanding the auction procedure helps a great deal.
A licensed auctioneer handles the property sale. The auctioneer guides the process of transacting real estate properties, offering it to bidders. The auctioned property goes to the highest bidder.
Disposing of a real estate property is not a walk in the park. Many sellers prefer involving an auctioneer to avoid the frustrating process. Some of the benefits of an auction include:
- The seller is not involved in the negotiation process
- It reduces time spent on purchasing the property
- Buyers determine the price
- Accelerated sale
Here is how the real estate auction day will unfold:
Before the auction
The property and agent should agree on the day of the auction. Determine factors such as the reserve price, the vendor bids, and any legal obligations and implications. Do not hesitate to ask any auction-related queries.
Half an hour before the commencement of the auction, the real estate agent should display the documentation of the property. It is a requirement by the law.
The agent will make announcements about the information, and the state laws applying to the real estate auction. For instance, will the vendors” bid or co-own bids are applicable. It is important to note auction rules vary from state to state. Make a point to discuss that issue with the agent before the sales day.
The auctioneer will ask for opening bids. He/she will start by setting an amount by which all bids will raise, for instance, $1000 increment rate. Alternative bid amounts are allowed. However, that discretion lies with the auctioneer.
The auction begins:
After setting the reserve price, based on the “market price,” the property will be sold to the highest bidder. If the reserve price is not determined, the auctioneer may ask the property owner if they wish to sell the property at a lower price. It should be done privately, though! Once the final bid is reached, and the seller loves the price, the auctioneer will say” going once, going twice, going thrice…” If no further bids are offered, the agent will declare the property “SOLD.” which is exactly what happened when Tim Burch recently purchased a pair of Olympic Village Condos For Sale.
Can I see the money?
The interested buyer should make an immediate deposit of 10 percent of the purchase price. It should be paid immediately after the auction. The remaining balance is paid within the 30, 60, or 90 days after the auction day. Once the sale is complete, the seller and the buyer sign the contract. Relevant cheese transfers are made at this point. After sealing the deal and the remaining balance of the property cleared, we can declare the property officially sold.