Real Estate Auction

By:   Date: 26 December 2009

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Real estate auction has been long accepted as the best way to determine the value of a real estate. It helps the buyers and sellers to meet at a marketplace and decide the price competitively for instant transaction. Thus a real estate auction helps in removing the possibility of speculation. Real estate auctions in most countries are conducted under the Real Estate Council and is regulated under the Real Estate Act. This act explains the legislative requirements which must be met when the auction is carried out. The relation that should be held between the auctioneers and real estate brokers is also dictated by this act.

Terminologies used in the real estate auction:

True Value- the true value of a real estate can be determined in many ways. It can be determined by what the seller asks for the property or the worth of the property according to an analyst or what the property deserves according to comparable sales method. However, in a real estate auction, the value of a property is decided by- what the 'highest bid buyer' is willing to pay for an instant deal.

Clients- clients are assisted by the real estate auction companies which act as partners in an auction and ensure that the deal is transparent. They help the lender/servicer to avoid foreclosure.

Depreciation- researches have shown that a non-earning real estate keeps on losing value when the owner is waiting for a buyer to bid a reasonable price. However there are findings that real estate auction conducted on transparent bidding can turn non-earning asset into cash.

Most companies arranging auction programs give a month's time to get ready for the auction. This is the time when one can answer the questions and decide the price that one is willing to pay for the real estate.


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