How Do Real Estate Auctions Work?

 

“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.

Engagement rules

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.

Opening bids

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:

Going once

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.

Are realtors necessary when purchasing a home?

custom-home-real-estatePurchasing a home is a big deal. In fact, acquiring a new home is the most expensive purchase an individual will ever make in their lifetime. This is a serious transaction that will also come with both financial and emotional ramifications. Because of this, proper representation is critical, and that’s where realtors come in.

You see, realtors are not just agents. Instead, a realtor is a professional and a member of a National Association, and thus they subscribe to the organization’s strict code of ethics. So if you’re wondering whether or not involving a realtor is important, these reasons will give you a definite answer to contact a realtor when buying or selling your property.

The industry has complex regulations

Buying a home is not like purchasing a plane ticket. That’s because every state has its unique regulations, plus every home is different. Generally, people acquire new homes in every 7-10 years. During this time, laws, practices, contracts, and regulations change a lot. Realtors stay current with these changes, meaning if you involve them, they will somehow put this knowledge to work in your favor.

Pricing and selling property

The internet has many sites where you can compare and view prices before knowing the price for which to buy or sell. However, conducting a transaction on these sites is a risk because most of them rely on outdated data and tax records.

But if you opt to use a Realtor service, you will be guaranteed of a fair purchase of a home that is not overpriced for the features it has. Realtors have up-to-date sale data, and they know every corner in town.

Contracts & Negotiations

Once you find a home, you will be required to deal with paperwork. A typical contract can have as many as 50 pages. It’s a legal document that can sometimes prove to be very difficult to understand. But a realtor can help navigate through the complex documents to come up with a good price offer. Again, realtors are good at negotiating prices. They can add an objective voice to a very subjective situation which works to your advantage.

Finally, a realtor will help you secure the best home

As many as 90% of potential homebuyers begin their search on the web, and some will go so far as to look at a realtor’s Facebook page. However, this does not guarantee that they will end up with the best property that their money can get. In fact, it is not possible to know all the pros and cons of a property if you don’ involve someone who is experienced.

Because realtors know all property within their vicinity, they can reveal some information that you didn’t know concerning homes in a specific area. They can tell you the common problems that homes built in a specific area often face, and this can save you from potentially buying a property that you will regret owning.

So when you go to a realtor, you’re not just getting recommendations based on square footage of the property and number of bedrooms. In short, you cannot make this decision on your own. Unless you want to gamble with your money, it’s not recommended that you go it alone. Take a look at http://savewithjohnanddave.com/ for more pros and cons of using a realtor to buy a home.

Importance Of Accounting In Real Estate

It won’t be wrong to say that a business cannot work without proper accounting. An accounting department is a must for every business, whether big or small. Accounting department not only keeps track of all the financial transactions done by the business but it also provides an accurate financial picture of the firm at any time. In simple terms, the accounting and bookkeeping department is a necessity in any industry and real estate sector is not an exception.

The accounting needs to be accurate and efficient. The best way to make sure that accounting is done in the right manner is to hire the services of an expert in the industry.

As far as real estate accounting principles are concerned, these are mostly similar to the accounting principles and strategies followed in other sectors, but some principles are unique to the real estate sector. However, it is important to keep in mind that accounting in real estate is a complicated job, and therefore, one needs to hire an accountant who has experience in this industry.

There are some different methods used for real estate accounting to keep track of various deals. Sometimes, the principles used in real estate may be distinct from the accounting norms followed in other industries, and this is the reason that it is recommended to hire the services of an experienced person for the job of an accountant in a real estate firm.

The role of a real estate accountant includes maintaining the ledger books, balance sheet, a record of the credit and debit transactions and a variety of other things. The accountant is also responsible for making accurate reports that provide a complete picture of the financial state of the firm to investors and management. These reports are used by investors for taking several important decisions. Therefore, the accuracy of the information contained in these reports is crucial.

These reports are not only used by shareholders and stakeholders but also by debtors and creditors such as banks and loan agencies who need a clear picture of the financials of the company to make sure that they will be able to get back the loaned amount. Similarly, these reports are also used by prospective investors who want to buy a stake in the company, and they make this decision by information provided in the books of accounts. The taxes are also decided by information provided in the books of accounts.

These days, some firms prefer to outsource their real estate accounting work. Some companies specialize in real estate accounting as it’s a very complicated process. One of the benefits of outsourcing is that accounting can be done at a cheaper rate, but it is important to hire the services of a reputable outsourcing firm to make sure that the accounting follows the accepted principles of real estate accounting.

Overall, real estate accounting is paramount to provide an accurate picture to the various stakeholders in the company. Therefore, it is important is either hire the services of an experienced accountant or outsource the work to a reputable accounting firm.