Here are 7 different strategies to consider when creating an auction.
1. When using a reserve price, start the bidding at least 50% below your reserve price. - You can never start too low. When buyers see you are using a reserve, they expect your starting bid is way below your reserve price. The idea is to attract attention. What starting bid will do that for you?
2. Consider NOT using a reserve price. - You don't have to use a reserve price and some buyers are more attracted to auctions with NO RESERVE (a.k.a. Absolute Auction). If you've got a great deal, your starting bid with "NO RESERVE" can attract just as many buyers as using a reserve.
3. Seller Financing - The number one question asked of sellers on our site is "Will you finance". If you are in a position to do that such as Contract for Deed, Lease-Option or even if it's on Hard Money terms (high interest rate, short term), your deal will be much more attractive.
4. Bid on Assignment Fee - As long as you are clear in your listing the terms of your contract and details of your contract available to the bidders, you can have the bidding be on your assignment fee. Start it at $100 and let the market determine what your contract is worth.
5. Bid on Your Option - Do you have an option on a property? Have investors bid on buying your option.
6. Include Property Resources - If you have a rental property you are selling, have a few property managment companies, handymen, etc. you can refer bidders to. Including these as part of your listing makes your auction more attractive.
7. Include Finance Resources - If you need to sell for cash, make it as easy as possible for interested bidders by including information about financing companies such as Hard Money Lenders, Mortgage Brokers, Lenders, etc.
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