Why Would A Seller OR Buyer Choose Auction?

Auctions provide an opportunity for a seller to place their property into a competitive and exciting bidding scenario in which all the terms and conditions are determined by the seller. The seller selects whether the property is sold with or without a reserve, the day it will sell, the non-refundable down payment amount and even the settlement date. This eliminates any negotiation pressure on the seller because all bidders are competing on the same fair terms. Auction properties are usually sold "as-is", relieving the seller or estate the burden of repairs, updates or cash outlays.

Buyers come prepared to buy, providing the assurance that property will be sold at true market value. Like any expedient sale, this provides rapid liquidity, reducing long-term carrying costs, including taxes and maintenance. Auctions attract qualified and serious buyers because most auction terms require a significant non-refundable earnest money deposit.

Not all properties are auction-worthy, but certain properties and situations will benefit greatly. With the competition among buyers, auction price can often exceed the price of a negotiated sale.

What situations would warrant an auction? Death, divorce, downsizing, the need to close an estate, dissolution of a partnership, cash flow needs and business closure are all solid reasons to consider an auction. Many businesses and estates enjoy the benefit of liquidating the real estate and the equipment or personal property simultaneously.

Buyers can also benefit from auction purchases. Buyers have an advantage to determine their purchase price. Smart investments are made as properties are usually purchased at fair market value through competitive bidding. The buyer knows the seller is committed to sell, reducing the time it takes to purchase the property and eliminating long negotiation periods. In multi-property auctions the buyer sees many offerings in the same place at the same time. The purchasing and closing dates are known, and the buyers know they are competing fairly and on the same terms as all other buyers.

Tim Keller 

H,K. Keller

717-879-0110

Lancaster, PA

tim@hkkeller.com | www.hkkeller.com

Facts, opinions and information expressed in the Blog represent the work of the author and are believed to be accurate, but are not guaranteed. The Lancaster County Association of Realtors is not liable for any potential errors, omissions or outdated information. If errors are noted within a post, please notify the Association. Posts represent the author's opinion and are not necessarily the opinion of the Association.