Archive for November, 2010
It used to be that real estate auctions had to be an in-person process. While traditional auctions allow more actual physical accessibility to viewing the property and original documentation, it can be difficult geographically when you’re interested in a property on the other side of the country. For real estate investors who actively purchase at auction, this used to be a deterrent. Thanks to the Internet and the latest upgrades in technology, on-line real estate auctions have given investors access to properties nationwide along with every piece of information necessary.
Sellers are well aware of the ease and convenience online auctioning offers the buying market. With due diligence obviously essential when purchasing a property, potential buyers can gather all necessary materials from various websites available 24 hours a day from the comfort of their own home or office. For example, according to realtytrac.com, Google and Microsoft provide free satellite and 3D maps to thoroughly investigate the location of most properties. Information about utilities, schools, area attractions, town development, etc., is all available online. Websites such as zillow.com and realtytrac.com also offer free home value analysis to give you an estimated value on the property of interest. Realtytrac.com reports of various online tutorials as well as live customer service available to assist in the online auction process.
This technological advantage is adding to the appeal and success of real estate auctions. From anywhere in the country, a potential buyer can bid on Rucker Realty’s 17,960 SF commercial building located in Concordia, Kansas, or on Elliot Paul & Company’s 1100+ SF condo in Boca Raton, Florida. From coast to coast, regardless of time zone, online auctions are available to countless bidders and buyers that provide an abundance of new investment opportunities.
With the real estate market being so unpredictable, real estate auctions remain an attractive and popular option for both sellers and buyers. Commercial and residential properties alike are being auctioned by various real estate professionals, and many investors see auctions as a golden opportunity to get the most bang for their buck. According to the National Auctioneers Association, $58.6 billion in commercial and residential real estate was sold at auction last year, and predicts that nearly a third of all real estate will be sold at auction by 2013.
In order to be a contender at an auction, potential bidders and buyers must be sure to have the required financing. Once your bid is accepted, it’s a done deal. So if you’re serious about purchasing at a real estate auction, be prepared. You must be pre-approved – not pre-qualified – for a loan. Pre-approvals are more detailed and require more documented information. The typical process would be to fill out an application with a bank or other financial institution for the highest amount you would be willing to spend on the property. You will be required to provide various documents including bank statements, W-2 forms, proof of IRAs or retirement accounts, most recent pay stubs, etc. Your credit report would also be checked during this process, and sometimes an application fee is involved depending on the institution. Upon completion and approval, you should receive a good faith estimate (GFE) which basically explains the terms of the loan, including the interest rate and loan type. When attending an auction, you would bring the pre-approval letter along with 5-10% earnest money of the possible purchase price.
Auctions continue to be a driving force in the real estate market – just check out the listings. From Fisher Auction Company’s November 30th auction of 10 properties throughout Miami/Dade/Broward Counties in Florida to United Country’s December 9th auction of a 154-acre mountaintop estate in Maricopa, Arizona, properties in both commercial and residential listings are being capitalized on nationwide – all through real estate auctions.
With the real estate market still floundering, many sellers today are turning to real estate auctions instead of using the traditional listing method. For both residential and commercial properties, real estate auctions are proving to be successful at making the sale while bringing in a lucrative profit. According to ezinearticles.com, “In the U.S. today, more people are actually buying foreclosures or properties on auction than they are making traditional real estate purchases.”
There are a plethora of benefits to real estate auctions for sellers, especially in today’s market. For starters, selling by auction puts your property in the spotlight on a specific date and time rather than being ‘just another listing’ in the thousands of properties using the traditional listing method. Buyers bid competitively, driving up the price of the sale rather than being negotiated down as with traditional listings. Sellers can be sure that people attending their auction are seriously interested in making a purchase, instead of enduring countless potential buyers who are often ‘just looking’. Also, an auction is an effective marketing strategy of a property, where it creates a unique curiosity and sense of urgency in buyers and investors.
Obviously those in the real estate industry are well aware of these benefits and more. United Country – Stone Auction & Realty has a key multi-property auction coming up on November 15 in Wilson, NC, including a 37,000 SF commercial steel building on a 3.4 acre lot. There are also a host of residential properties set for auction, including a 3,740 SF luxury lakefront home in Bonneau, NC represented by Tranzon Integrity Partners on November 2. With the success rate of real estate auctions only increasing, you can expect more sellers and investors to be taking advantage of this profitable option.