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Four Tips for Attending Your Next Property Auction

Property Auction

Essentials To Know At Real Estate Auction

So, you love auctions, but you find yourself in a bit of a bind when you attend one. Never get caught off guard again because you can now feel prepared. Auctions can be a bit tricky because you often feel like a kid in a candy store. However, you can attend a property auction (personal or real estate) and come out on top. Here are 4 tips to take to heart before attending property auctions:

#1.Check out the property

Before you purchase property (real or personal) at an auction you will want to become familiar with different terms.  There are auction terms and real estate terms and knowing both will help you have a greater understanding.  Next you will want to preview the auction. You can preview real estate and estates personal property at an open house and online and some even have videos to watch.  If you are serious about purchasing the property, then you will want to have a home inspection completed if it’s a developed property.

For undeveloped properties, you will want to ask about mineral rights and approved zoning. You may want to build a shopping mall (commercial use) but if it is zoned for agricultural use only you may to spend a lot more money battling a local bureaucracy to have it changed for you to do what you would like with it. 

#2. Understand the difference between want and need

If you have a budget in mind when it comes to purchasing a property, then you should know the difference between a want and a need. When it comes to purchasing real estate properties, you cannot waiver back and forth. There will be a lot of serious bidders out there. Will you be one of them?

#3. Secure financing before the property auction

Unless you have a pocket full of cash before a property auction, you should always secure financing. See how much you are qualified for and be prepared to put a good amount of money down. Securing financing for an auction is a little different than other types of financing. It’s a proven fact that the more actual cash you can put down on the property then the better off you will be with the banks.

#4. Be prepared for anything

When going to an auction property prepare for anything. The property can be better or worse than what you expected. You might even be able to get a better deal than what you first anticipated. One thing is for sure, bidding on property at an auction is nothing like sifting through a property magazine. It’s a rewarding and exhilarating experience and something you will want to be a part of in your lifetime.

One should always do their research before going to buy real estate at auction and then buying at Auction is easy!

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The Advantages of Selling Property at Auction

Discover Advantages Of Selling Real Estate At Auction

According to a study conducted by Harris Interactive some 83% of people believe that auctions are a way to find good deals. Those with a home for sale or other property for sale need to seriously consider the benefits of selling at auction.  Homes for sale can take months or even years to sell. Those with a house to sell often put out all sorts of money into repairs and updates.

Buying a house can be just as frustrating with the owner turning down bid after bid. However, with an auction and an auctioneer there is no need for constantly searching for homes for sale. Buyers don’t have to go through a property search. Instead, they search the auction listings on websites like Real Estate Auction MLS to find homes for sale or other available real estate. At auction, a buyer doesn’t have to go through exhausting negotiations to get that desired home for sale. All a buyer has to do is to make the best bid. The person offering the most amount purchases the property for sale on the spot.

Real Estate at AuctionThe seller of the house for sale benefits by the immediate turn around on the real estate. The seller doesn’t have to put up with strangers continually traipsing through the house for sale and prolonging the process of offering real estate for sale. Auctions allow the seller to set the time and place of the sale. There is no confusion as to when the auctioneer will do his job or when those interested in buying a house will be on hand.

An Agent and/or Realtor searching for a property isn’t necessary. Those who wish to buy a house simply contact the auctioneer for a tour of the home, schedule a home inspection if they want and show up at the time and place listed for the real estate for sale. It takes a long time with the services of a real estate agent to let the public know they may buy a house. Because it is a contingent sale (conditions placed by the buyer – fix this, repair that, reduce for the next thing, bank financing, etc.) and because the seller makes the initial offer of a price, the only thing a seller can count on is the price being negotiated down. However, when property is sold at auction, the auctioneer, wants as many qualified buyers as possible to attend and only qualified buyers can participate. Auctioneers do extensive marketing to the targeted buyer(s). Because the seller knows that their property will sell in the present condition (as is) and is not contingent upon financing it eliminates the unqualified buyers from participating at the auction. This saves the seller money, time and effort. The seller can plan and move on with their life knowing when their property will be sold and that it will be to the highest bidder at a price that is based upon the reality of what it is worth.

Other benefits include the seller not needing to invest in repairs or upgrades. Everyone has different tastes and a new owner can make it their home by renovating as they would like and not according to what an Agent and/or Realtor wanting to double as an interior decorator, landscape architect or home renovation expert thinks it should be to get the home sold. Auction companies and auctioneers are to specialize in getting the most exposure possible and top dollar for their client and if they have marketed the property properly and at the end of the day when the property is sold and changes hands in this simple transaction, it will be at a price that is both fair to the seller and to the buyer.

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3 Reasons Auctions are Relevant to Buying

 

sell at auction3 Reasons Auctions are Still Relevant to Buying & Selling Land

Most of the summer you have heard about the drought and how it has impacted all most every way of life, but there is good news in the auction world. Land is a huge part of auctions and it’s been a consistent seller this year throughout several states. Many are baffled as to why land would be still valuable even though it’s been through so much with the weather and drought this summer.

#1. Auctions are timeless.

Auctions attract a lot of people, but they especially attract buyers are who are interested in purchasing land. One of the main reasons is they are looking to get a great deal and they are looking to come out with something they can turn for profit. Showing up at an auction that is releasing large amounts of land is a no brainer.
It shows that auctions are timeless, no matter what the situation. It also shows that land is desirable even if it’s been through one of the droughts in history. Bringing both together is genius in the sense that the seller gets what they were looking for and so does the buyer.

#2. Auctions still bring quality.

Land sold at auctions still will sell at different rates. Land that has better soil and quality of land will obviously sell better. However, those who thought that their land wouldn’t sell because it was affected by the drought were wrong. Those who attend auctions are looking for different things and you never know if you have the product in which that person may be looking for.

#3. Auctions bring the long term.

Often when someone is looking to purchase they have long term goals in mind and that’s what is ideal about auctions. A lot of people who attended auctions this summer were looking at long term goals in terms of land. Just because the land had a rough year this year doesn’t mean it won’t see better years.
(Most) people who attend auctions have goals that they want to reach and they look at it as an investment. The truth is that passing up on selling land at an auction, or anything for that matter, could be a bad move on your part. Auctions are proving over and over again to be a positive way to sell and obtain long term investment pieces.
Have you thought about attending an auction lately to buy or sell a piece of land?

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Auctions Provide A Fair Opportunity For Both Sellers And Buyers

scalesEver wonder what’s the most unbiased way for buyers and sellers to interact where both can engage each other without completely exposing their bottom line?

Is it with the list, wait, and continuously reduce method of traditional selling by agent/realtor? How does the seller know they really received the most a person is willing to pay with this method of selling?

Fact is they don’t, because with selling by private treaty with an agent/realtor there are always contingencies and it is never time definite. What does that mean? Contingencies – The private treaty method of selling puts the buyer in control of the sale where they are able to dictate to the seller what they want fixed, replaced or anything they are able to negotiate in the sale to get what they want. Time Indefinite – The sellers never know when their real estate will be sold. Sure an agent and/or realtor may have a contract and they are usually six months long or up to a year and sometimes even longer. Can the seller of a home afford to be at the mercy of a prospective buyer who can dictate when they will buy the home, what contingencies they demand and the price they are willing to pay?

Can sellers really afford to wait today to have a home sold? What about the price? What is too much to ask? What happens if it is not enough? How can they tell either way? Fact is they really can’t.

The auction method is the only method of selling where an equitable opportunity for both sellers and buyers to come together and discover what the market is willing to bear upon the real estate being sold.

With the auction method of selling, buyers are able to set a reserve price and/or a minimum they wish to receive for their real estate. At many auctions I often have bidders ask, “What is the reserve price for the real estate?” I politely ask them, “What is the most you are willing to pay?” Most then realize that it would not be fair for me to tell them what the seller is willing to take or for me to start the bidding at their highest bid. At the auction we provide the equitable opportunity for the sellers and buyers to engage each other when we call for bids. Sometimes the price is more than what the seller has expressed they wanted and sometimes it is less! The bottom line is that it is the reality of what the real estate is worth. This is called “true market value.”

With the auction method the sellers don’t forfeit the most their real estate could possibly be sold because they have not put a price on it by making the initial offer to the public. With the auction method the buyers don’t forfeit more than what the market will bear by making a counter offer that may be too high. The auction method is time definite and both buyers and sellers can plan to move forward with their respective lives by knowing when their real estate will be sold and/or purchased. Do you want to receive the most money possible for your real estate? Do you want to pay the least amount possible for real estate? You know now where both come together in the most fair and free market method of engaging each other – at auction. Contact us today and let us help make certain your hope by faith through grace today.

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Real Estate Buyers Walk Away Because Of Gap Between Sale Price And Appraised Value

Real Estate AppraisalThe obvious problem with the methods of appraised values of homes and/or the comparative market analysis (CMA) used by Agents & Realtors to try to speculate on a value of a home is causing many home buyers to walk away and home sellers to suffer even more loss. Reported in the Wall Street Journal, “asking prices are often out of whack with values that are later determined by appraisals.”1 The real problem is that Appraisers, Agents and/or Realtors do not deal in the reality of what each property is worth and at best can only speculate.

Attempting to measure and speculate on a value of a home or property nearby that is similar that sold in the past six months in the same or similar neighborhood to try to determine a price is not fair to the sellers or the buyers. Even if an Appraiser, Agent and/or Realtor try to use older sales going back several years they still are not able to find relevant numbers. All markets are always in fluctuation and each and every home or any property, developed or undeveloped land is unique and has its own features and benefits and liabilities and should speak for itself and not by what another has sold for in the past, present or future ? no matter how what similarities exist.

The method of guessing by Appraisers and Realtors and/or Agents are not just limited to residential , commercial or undeveloped land but when it involves luxury properties it becomes even worse. Matters used to speculate like, services and amenities in neighborhoods, school district funding, police and fire services make any quantifiable data with relevant numbers for guessing a value next to impossible. So what is the practical result of the guessing system used by Appraisers, Realtors and Agents? The process leads more often than not to an appraisal amount that is much higher than the private treaty sale (negotiated sale) agreed upon price between the seller and the buyer. n the same or similar neighborhood to try to determine a price is not fair to the sellers or the buyers. Even if an Appraiser, Agent and/or Realtor try to use older sales going back several years they still are not able to find relevant numbers. All markets are always in fluctuation and each and every home or any property, developed or undeveloped land is unique and has its own features and benefits and liabilities and should speak for itself and not by what another has sold for in the past, present or future ? no matter how what similarities exist.

A study was conducted that “confirms what many of us have thought but heretofore have only known anecdotally: That appraisals are not very accurate.”2 and that “a wide discrepancy between the appraisal values and the eventual sales prices of the properties.?3 Statistics from the study revealed that 64% of real estate was appraised at a value that was higher than the sale price and only 35% appraised less than the actual sale price.4 This study also revealed that “at the extremes, in 121 instances, the appraised value was more than double the sale price, and in 132 examples, the appraisal was less than 70 percent of the sale price.”5 So what if the appraisals are only a speculation at best about a value of real estate? Appraisals are what banks have been conditioned to think is an “accurate” way to find a value to real estate. An attorney at a law firm said, “Appraisals are important in nearly every aspect of a real estate deal, whether it is originating a loan, working out a loan, the decision to buy or sell a property and even bankruptcy.”6

What practically happens as a result of appraisals? The result has an effect upon everyone involved with the process of selling the real estate. The appraisal affects the result of what lenders offer to loan. A low appraisal results in a smaller amount for a mortgage on a property and a higher rate. What if the appraisal results in a value less than the “list” list price? When this happens someone is left with making up the difference. Either the buyer has to make a larger deposit for the mortgage or the buyer refuses to pay more than the appraised amount. This huge gap between the appraised price and what the seller wants and what the buyer is willing to pay has made many private treaty (negotiated sales) go South fast.

According to the National Association of Realtors (NAR) survey of over 3000 Agents, on average, one-third of real-estate agents said the appraisal process resulted in buyers and sellers delaying or canceling contracts or renegotiating to a lower sales price last year.7 According to the Wall Street Journal, going forward, experts say that one third of contracts being cancelled will increase.8 What if the loan amount is more than the value of the home by 80%? The buyer will have to put more money down.

Home AppraisalSo what is the alternative to appraisals and their method of real estate valuation and sales (private treaty – negotiated sales)? The problem is that both can at best ever only speculate on a value and price for a home or property. Is there a method of selling that only deals in the reality of what property is worth? How can anyone actually know what is the true market value of a home or property? The answer is the auction method of selling. The auction method is the only method of selling where true and fair market value is found that is based in reality, without any speculation. Fact is that every home and property is different and the guessing method of finding a similar home or property that sold is to use to try to measure the other is a disservice to all parties involved.

So practically what is the best way for Real Estate Sellers, Buyers and Banks to come to terms in what that is fairly? An auction provides the very best way for all parties to be treated fair. The seller finds out what is fair when buyers compete to buy the home and the price is discovered at auction where all the serious buyers come together and bid. The buyer prior to the auction can go and find out what they pre-qualify for with a loan for the real estate so they know their limit when it comes to biding at the auction. The banks can offer lower rates because they know that the real estate sold for the reality of what it is really worth.

Auctions also eliminate all the contingencies that are part of the traditional sales methods with Agents & Realtors because when the hammer falls the property is actually sold. It is not contingent upon appraisal, fixing this, repairing that, upgrading or the next thing. The real estate actually is sold.

True Market ValueWill you continue to not face the reality of what real estate is worth? Will you depend upon antiquated methods that are nothing more than only a speculation at best? If you have a property and want to sell it for what it is really worth and not settle for one cent less than contact us to schedule an auction. If you are a buyer and want to not pay more than what a home is really worth, then find an auction to buy your home or property. If you are a loan officer you will only have to find what a person is eligible to borrow instead of taking the risk and the speculation of an appraisal. Contact Us today at True Blue Auctions and let us Make Certain Your Hope By Faith Through Grace