Understanding Non-Distressed Auctions
Auctions are often associated with distressed properties, but this stereotype is not always accurate. Real Estate Auction Statistics
Real estate auctions often attract a larger group of buyers compared to traditional sales due to the involvement of emotions and ego rather than just the price. Here are some reasons why real estate auctions can be more appealing:
Emotional Investment
Real estate auctions create a sense of urgency and competition among buyers, leading to emotional investment in the property. As bidders strive to outdo each other, the competitive nature of the auction can drive higher offers.
Sense of Urgency
Auctions typically have a set date and time, creating a sense of urgency for buyers to make a decision. This urgency can motivate potential buyers to act quickly and decisively.
Competitive Bidding
The competitive bidding process in auctions can result in better pricing outcomes for sellers. Buyers, motivated by the desire to win the property, may be willing to offer higher prices than they would in a traditional negotiation setting.
Immediate Cash for Sellers:
Auctions offer a win-win situation where sellers obtain immediate cash, and buyers can purchase properties at fair market value. This immediate transaction benefits sellers who may need a quick sale.
Motivation through Deadline
The definite sale date in an auction motivates buyers by giving them a clear goal and deadline. This can lead to increased interest and participation from potential buyers.
Faster Turnaround Times
Real estate auctions offer the potential for faster turnaround times compared to traditional sales. This efficiency can be attractive to both buyers and sellers looking for a quicker transaction.
Highly Motivated Buyers
Auctions tend to attract highly motivated buyers who are actively seeking a property. The competitive and transparent nature of auctions appeals to individuals ready to make a purchase. While bidding wars are possible through a traditional private sale, an intense auction environment tends to fuel heightened competition by design.
Unlocking the Power of Auction
Advantages of Selling At Auction
- Quick Sale Of Property
- Reduces Long-Term Carrying Costs, Including Taxes And Maintenance
- Assurance That Property Will Be Sold At True Market Value
- Accelerates The Sale In As Little As 30 Days Or Less
- Creates Competition Among Buyers
- Auction Price Can Exceed The Price Of A Negotiated Sale
- Takes The Seller Out Of The Negotiation Process
- Buyers Come Prepared To Buy
- Exposes The Property To A Larger Number Of Pre-Qualified Prospects
- Requires Potential Buyers To Pre-Qualify For Financing
- The Seller Knows Exactly When The Property Will Sell
- Provides An Aggressive Marketing Program
- Increases Interest And Visibility For The Property
- Eliminates Numerous And Unscheduled Showings
- Property Sells For All Cash, As Is, With No Contingencies
While price remains a significant factor in real estate transactions, the emotional and competitive elements introduced in auctions contribute to the broader appeal and larger buyer turnout. Example the best buyer for a 1M home is the buyer looking at 900K and in a traditional sale the 900K buyer would NOT even looked at a 1M home
Statistics say that 51% more traffic to the auction over the traditional sale also the buyer that buys the property at auction 47% of the time are looking for a cheaper price home but because they saw it at a lower bid emotion ego and emotion take over!
