When it comes to online real estate auctions, there is still a lot of confusion among real estate agents on how they work. Here is another myth...
Myth: If I use an online auction, I MUST sell to the highest bidder.
Truth: Most online and even "live" auctions are done using a hidden reserve or “Subject To Confirmation”. In either case, the seller and agent are protected and not forced to sell if the bidding doesn’t get high enough. An "absolute" auction is the only auction type that requires the seller to sell at the high bid. So, unless, you see the word "Absolute" in the marketing of an auction, there is a reserve.
When an auction is marketed correctly, the process brings true market value for a property. Even in the case where that price isn't as high as the seller had hoped, you can use the online bidding process to help the seller see what buyers are willing to pay.
Right now, I'm seeing more and more online auctions used for short-sale situations because it's a quick way to get the highest and best offer to present to the lender. The competitive bidding also presents a good case that the highest bid is "true market value".
Wednesday, April 28, 2010
I'm not selling to the highest bidder!
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