Selling your Home via Auction

Your home isn't selling right now. The listings may be saturated with the type of property you have to offer, or the market could just be sour. But there are other options that you can use to move your property. One such option is to put it up for auction.

When the word auction is mentioned, many people think either of Sotheby's or an estate sale. One is a prestigious way to get a very large amount of money for your product, while the other is an attempt to get whatever you can. Selling a home via auction, however, is actually neither of those two extremes. But it will afford you an opportunity to get a good price for your home if you've been unsuccessful using the conventional sales method.

One advantage to using a home auction is the turnaround time. Auctions use a specific timeframe to advertise and market a property before holding the sale. The time is typically six weeks from the date that you sign the contract with the auction house. During that six week period they will do all they can to advertise your home using a number of different venues. They'll get the word out in direct mailings, brochures, newspapers, and trade publications. If the property is a high profile one, they may also use radio and television ads.

Before you sign the contract, be aware that you have the right to dictate the minimum price of the sale, also known as a reserve price. If you've already been through the price-dropping process while trying to sell on the open market, you may have settled on a firm price for your home. You have that right. Selling subject to a reserve means that if the bid amounts don't meet the minimum set price, the owner doesn't have to sell the property.

You also have the option of using an absolute auction. This means that the house will be sold regardless of the dollar amount of the winning bid. It could be your requested price or it could be much lower. Owners who want to be assured of a quick sale may use this type of auction.

Auction bidders must have the money to back up their bids. Selling traditionally, financing may fall through at the last minute, causing a deal to fail. That's not the case with auctions. There is no financing or further negotiation. Bidders must their financing in place before being allowed to bid. Auctioning is a cash-only transaction; the winning bidder is guaranteed to make the purchase.

Auctions are not, however, immune to fluctuations in the real estate market. Bidders generally will not pay more than the market value if there's an inventory of property. Therefore, the more there is to choose from, the lower the price will be for the seller. Nevertheless, selling a home at auction presents a number of advantages. If you need to sell your property and your real estate agent hasn't been able to move it, consider putting it on the auction block.