What Type Of Auction Is Right For Your Home

For some home owners, the fastest and most effective way to sell their property is via a real estate auction. The tempo and excitement generated from the auctioneer, coupled with the enthusiastic bargain hunters will almost always yield a quick sale. Not to be confused with repossessed properties that are sold at auction on the court house steps, the real estate auction houses provide a platform for eager sellers and qualified buyers to come together under one roof. The real estate auction blocks are a win-win situation for distressed borrowers to release the cumbersome property, and can be a treasure trove for real estate investors and savvy home buyers.

1. The Absolute Auction.

The absolute auction is a standard type of auction process where the property will be sold to the highest bidder. The absolute auction will not set forth a reserve price and may be regarded as one of best venues to market and move a property. And although the property may move quickly, there is always a risk to the seller that the highest bid might fall below market value. In such cases, the deal is sealed at the sound of the gavel at whatever the final bid may bring.

If you wish to present your home to an absolute auction bidding list, check with your local Realty Association for a list of professionals in your area. And no town is too small for a property to fair well at an absolute auction. The sale is guaranteed as long as there is at least one qualified bidder, and is safe to assume that the bidders will be plentiful. The absolute auction is a favorite with those seeking a home purchase and for the active real estate investor. Marketing campaigns are well-financed by the auction house and usually generate a large crowd.

2. The Reserve Auction.

The reserve auction is similar to the absolute auction, except the seller has the right to set forth a minimum bid. In addition, the seller may accept or decline an offer or may opt to counter a specific bid. If the seller's minimum acceptance price has been met, then the seller has the right to declare that he or she wishes to convert the auction process into an absolute auction, whereas all the terms and conditions applied to the absolute auction will be observed.

The reserve auction is a definite advantage to the seller as the terms and conditions allow the seller to accept or reject an offer made on the home. In some cases where the sellers could not move their properties fast enough, even through a short sale, the reserve auction allows them a chance to get the top dollar amount to put towards their mortgage balance. In a successful reserve auction, the seller may walk away with several thousand dollars short of the loan balance, but the shortage may be negotiated with the lender and a payment plan devised to bring the outstanding balance down to zero. The bottom line is that the reserve auction puts the seller in the driver's seat and allows for greater financial control.

About the Author:

Joe Cline writes articles for Austin Texas real estate. Other articles written by the author related to Lakeway real estate and Austin real estate can be found on the net.