Arnold
CibbuanoAuctions and Fixed Price Sales
August 8th 2006 00:51
One of the key decisions any property seller has to make is how they are going to trade their property on the market. Will they follow a fixed price or opt for an auction method of sale. There are benefits and disadvantages to both forms of trade. The next few posts are going to look at some of the pros, cons and issues with selling your property either at auction or listing it at a fixed price.
Whether you are a buyer of a seller auctions can be a daunting experience for novices and may not be the best option for everyone. Despite this, they are fast becoming the most popular way of trading property. Before you decide to buy or sell a property at auction it is a good idea to get in a bit of experience and visit a few auctions. This will help you become familiar with the auctioning process and comfortable with the surrounds.
One of the biggest dangers for a buyer at auction is that they’ll get absorbed in the bidding process and bid beyond their bidding limit. Having attended a few auctions I can see how it can be easily done. Auctioneer’s are skilled in the art of persuasion to lure the final few thousands out of a bidder and once you get in a bidding war you can find see the competitive spirit emerging where people feel they have to outbid a fellow bidder at any cost. Despite the risk of exceeding your auction limits, auctions can be a beneficial way of purchasing bargain property.
So what actually is an auction??? An auction is the sale of property in public to the highest bidder. Buyers bid for the property by nominating a price they are willing to pay. Each successive bid adds to the value of the property until the bidding stops. The auctioneer calls the end of the bidding and at the drop of the hammer, the highest bidder is eligible to claim the property at their nominated price provided it is above the seller’s reserve price. The reserve is nominated by seller and is the lowest amount that the seller is willing to accept for the sale of their property. Usually during an auction the auctioneer will announce when the property has reached the reserve by announcing that the property is “on the market.”
If the final bid does not reach the reserve price, the house is “passed in.” This means that the property is not eligible for sale to the highest bidder. At this point, the seller and the highest bidder will usually enter into a round of negotiations and they may agree to a selling price for the property.
In practice, this is process is usually accompanied by a gaggle of real estate agents who will almost always to encourage the highest bidder to offer a slightly higher price and the encourage the seller to lower their price. In effect they seek to offer some sort of middle ground. Considering they’ll be getting a commission on the sale, for a real estate agent, any sort of sale is better than no sale. If an agreed price can not be reached, the seller can take the property off the market or put it up for sale again at a later date.
Whether you are a buyer of a seller auctions can be a daunting experience for novices and may not be the best option for everyone. Despite this, they are fast becoming the most popular way of trading property. Before you decide to buy or sell a property at auction it is a good idea to get in a bit of experience and visit a few auctions. This will help you become familiar with the auctioning process and comfortable with the surrounds.
One of the biggest dangers for a buyer at auction is that they’ll get absorbed in the bidding process and bid beyond their bidding limit. Having attended a few auctions I can see how it can be easily done. Auctioneer’s are skilled in the art of persuasion to lure the final few thousands out of a bidder and once you get in a bidding war you can find see the competitive spirit emerging where people feel they have to outbid a fellow bidder at any cost. Despite the risk of exceeding your auction limits, auctions can be a beneficial way of purchasing bargain property.
So what actually is an auction??? An auction is the sale of property in public to the highest bidder. Buyers bid for the property by nominating a price they are willing to pay. Each successive bid adds to the value of the property until the bidding stops. The auctioneer calls the end of the bidding and at the drop of the hammer, the highest bidder is eligible to claim the property at their nominated price provided it is above the seller’s reserve price. The reserve is nominated by seller and is the lowest amount that the seller is willing to accept for the sale of their property. Usually during an auction the auctioneer will announce when the property has reached the reserve by announcing that the property is “on the market.”
If the final bid does not reach the reserve price, the house is “passed in.” This means that the property is not eligible for sale to the highest bidder. At this point, the seller and the highest bidder will usually enter into a round of negotiations and they may agree to a selling price for the property.
In practice, this is process is usually accompanied by a gaggle of real estate agents who will almost always to encourage the highest bidder to offer a slightly higher price and the encourage the seller to lower their price. In effect they seek to offer some sort of middle ground. Considering they’ll be getting a commission on the sale, for a real estate agent, any sort of sale is better than no sale. If an agreed price can not be reached, the seller can take the property off the market or put it up for sale again at a later date.
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