Real Estate Auctions

Guide to Real Estate Auctions

Strategies on how to buy or sell property through a real estate auction
By Frances Sharpe

Real estate auctions are the fastest growing category in the auction industry. Whether you want to buy or sell real property, auctions can be the way to go. For sellers, real estate auctions can shorten the selling cycle, which results in savings in terms of interest expenses, property taxes, maintenance costs and insurance costs. In addition, with a real estate auction, you sell your property on a specific day, which allows you to plan accordingly for the future.

Real estate auctions benefit buyers, too. Sellers are often motivated, which translates to lower purchase prices. And since the terms of sale are set in advance, real estate auctions let buyers avoid long drawn-out negotiations.

Real estate auctions can be one of three types:

1. When a real estate auction is a “reserve auction”, it means the seller reserves the right to reject or accept any bid.
2. Real estate auctions that are “absolute auctions” mean a property will be sold to the highest bidder regardless of the bid.
3. In realty auctions that are “minimum bid auctions”, bidding starts at a specified minimum bid and is sold to the highest bidder above that price.

Action Steps

The best contacts and resources to help you get it done

Search for real estate auctions online It's easy to find real property auctions in your area using online resources.

I recommend:  The NAA Real Estate Auctions online search function lets you search for auctions nationwide by area or by type: commercial, residential, timeshare, land, general or farm.

Government real estate auctions Every year, millions of dollars worth of property is seized by government agencies, such as law enforcement agencies. These assets are typically sold via real property auctions, which often include real estate.

I recommend:  For a listing of government real estate auctions in your state, check GovernmentAuctions.org. You’ll need to register and pay a nominal fee, but that gives you access to the listings for real estate auctions and a variety of other auctions for a full year. Rick Levin & Associates provides real property auction services for a number of government agencies.

Online real estate auctions With online auctions, real estate can be purchased or sold without attending an in-person auction.

I recommend:  Williams & Williams offers certain properties for sale exclusively through online real estate auctions. RealtyBid.com has sold thousands of residential homes through its online real estate auctions.

Search for real estate auctions on foreclosures Many financial institutions turn to real estate auctions to sell homes that have fallen into foreclosure. This can be a way for buyers to purchase real estate at below market value.

I recommend:  RealtyTrac boasts the largest database of foreclosure properties in the nation, many of which are available via real estate auctions.

High-end real property auctions Whether you're buying or selling luxury properties, look for real estate auction services that cater to a discerning clientele.

I recommend:  The Redfield Group, J.P. King Auction Company, Grand Estates Auction Company and Christenson-Elms Auction Group specialize in high-end properties in their real estate auctions.

Commercial real estate auctions For commercial real estate, auctions should be handled by firms with expertise in commercial properties.

I recommend:  Express Real Estate Auction Services and PropertyAuction.com handle commercial real estate auctions in addition to residential auctions. Thomas Industries specializes in industrial and commercial real estate auctions in addition to machinery auctions and other industrial real property auctions.

Tips & Tactics

Helpful advice for making the most of this Guide

• Real estate agents, brokers, corporations, private individuals, appraisers, attorneys, government agencies and financial institutions are known to use real estate auction services.
• Real estate auctions often require upfront deposits, but some offer free bidding.
• With online auctions, real estate can be bid on at any time day or night.
• Real property auctions should include property information, such as maps, surveys, tax requirements and spec sheets.
• When buying through real estate auctions online, you may not have a chance to view the property before making a binding bid.