What if my buyer backs out?

Another common question from Realtors is "What happens if the winning bidder backs out?"

Since online real estate auctions are legally bidding, it's not much different than a standard written purchase contract. The TERMS on a written contract spells out what happens if the buyer defaults.

You can setup the TERMS on your online real estate auction to define what is expected if the winning bidder defaults.

When a buyer defaults, it's up to you on whether you enforce the TERMS that you state.

The key is to have terms that are not too strict to scare a person from bidding, but also not too unrestricted so it isn't taken seriously.

In summary, you, as the listing agent, are in full control of what
happens when the winner bidder backs out.

What is your reserve price?

The most common question asked by a bidder during a real estate online auction is "What is the reserve price?" In other words, what is the bottom line price you will take?

Would you ever tell someone your bottom line price when you're selling a property?

I hope not.

If you do, you've just lost all power to negotiate.

I'm surprised that about 20% of the seller's using our system disclose their reserve price when asked this question.

To me, it doesn't make sense to tell anyone your bottom line price, especially when bidding is open.

Instead, I think it's better to respond to that question by inviting them to submit the highest amount they will pay.

After all, it's very easy for them to do.

Hope that helps next time you're faced with that question.

Does an auction mean I failed?

Sometimes real estate agents stay away from using auctions because they think it makes them look bad. They think that they are raising their hand and saying "I failed selling this property the traditional way and I'm forced to try an auction".

This is far from the truth. Yes, an auction is often used in a desperate situation, but it doesn't need to be that way.

A real estate online auction is simply a great way to accelerate the sale, while automating the negotiation with several buyers at the same time. It gives the Realtor the ability to be in control of selling their listings.

It's a "slight edge" that a Realtor can use in any market.