Saturday, August 05, 2006

Auctions...the rage?

I've been reading all these articles about Seller's going the auction route are our housing market cools. Is it something for you to consider?

Here's the process roughly/typically:

Oftentimes the auction firms will hold a few open houses before the scheduled auction. At this time, potential bidders can usually get a buyer information packet that will include a sales contract, seller disclosure form, an inspection report and appraisal. Many auction firms share sales commissions with real estate agents who bring buyers to auctions.

Before being allowed to bid, potential buyers must have a cashier's check for earnest money. Should you win a bid, the cashier's check goes into escrow and a % of the sales price will be due in a matter of days (usually 5-10%).

Sellers often pay a commission to the auction firm for its services and marketing...these fee is paid up front so the firm can advertise and conduct open houses.

There are typically three types of auctions:

*Minimum bid - where the Seller puts a floor under what they'll get.
*Absolute auction - which guarantees a sale.
*Reserve bidding - whereby Seller has the right to refuse.

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