Written By: Karen Deis
A hot, desirable property has just been listed. Several buyers come out of the woodwork with their perspective real estate agents to bid on the home. It sells for $20,000 over the listing price.
The difference between this scenario and a real estate auction is there is a real estate agent representing the seller and the seller pays the real estate commission. Whereas an auctioneer represents the seller and the buyer pays the auctioneers commission.
Unfortunately, foreclosures are at an all time high. Listings are glutting the market. In an economy like this, real estate auctions ARE a niche you simply cannot ignore!
This article will cover 3 types of real estate auctions.
Multiple House Auctions – where hundreds of homes are sold in one day
Individual Property/Open Bid – One home sold on a specific day
Individual Property/Sealed Bid – Period of time to submit & all compared
What each method has in common is that if the bidder needs to finance the property they are bidding on, a pre-approval letter must accompany their bid. That’s where you have an opportunity to cash in on the auction process—but only if you know how it works and how to get those deals to the closing table.
Before we cover the different types of auctions and how you might be able to specialize, here are a few terms you need to know.
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