Chicago real estate auctions
I knew very little about Chicago real estate auctions when I joined the staff of OwnACondo.com about a month ago. But I am learning quickly about the advantages of condo auctions in particular.
Over the years I have been to a few vehicle auctions, and I am familiar with livestock and farm auctions also. However, I was surprised to learn that industry officials believe as much as 30 percent of all residential property sold annually in the United States will soon come under the gavel of an auctioneer, possibly even more. Already, according to the National Auctioneers Association, $60 billion worth of real estate was sold by auction in 2008.
As I find out more about auctions, it is easy to understand why so many people see them as the way to go when it comes to selling condos, townhomes and other residential property. For motivated sellers and qualified buyers, real estate auctions are an ideal way to do business.
For instance, the traditional way of selling real estate can be fraught with problems and frustrating setbacks. Especially during the current difficult economic climate, perfectly good condos for sale can languish on the market for many months, while sellers wait patiently for qualified buyers. Sellers are often already financially strapped, and if the process drags on too long, the carrying costs of holding on to the property can quickly get out of hand. Banks and other mortgage lenders that find themselves inundated with foreclosed properties can also use real estate auctions to get them off the books, selling the properties quickly and easily, with the least amount of hassle and maximum amount of profit.
One of the many advantages of Chicago real estate auctions is that the brokerage firm conducting the auction handles all the marketing and advertising that the seller would otherwise have to do. Because the goal is to attract as many prospective buyers to auctions as possible, the events are always heavily advertised for about six weeks leading up them. OwnACondo.com holds several open houses to allow prospective buyers to inspect the properties that interest them. Company representatives also organize and produce disclosure packets and auction presentations, everything needed to prepare buyers and sellers for the auction. The advertising fee paid by the seller to take part in the auction is well worth the immense amount of high-visibility marketing done by OwnACondo.com to promote the event, which all puts the seller’s property in the spotlight.
A well-attended auction benefits buyers and sellers. The marketing is designed to drive everyone interested in the properties to attend, and this means that the auction process will determine the fair market price of the property. In order to place bids, prospective buyers also must prove they have property financing in place and bring earnest money to the auction , so once the winning bid is decided, the closing can be completed in as little as 30 days. In fact, with an enforced closing date, the sale must be completed within 45 days. A winning bidder who does not complete the sale will lose his or her earnest money.
The bid calling and competitive nature of auctions add to the excitement of the events, and can escalate the price of property above what a seller expected. But by the same token, winning bidders can get deals also, and pay less than expected for a property they really like. Absolute auctions, in which the seller agrees to sell the property for whatever the winning bid turns out to be often generate the most excitement, because the sale is guaranteed. But sellers concerned that they may have to give up the property for an unacceptable price have the option of either setting a minimum bid, which would be published prior to the auction, or setting a reserve price that would not be published. In that case, the seller would have the right to accept or reject the winning bid within a certain period, usually three days.
Ideally, both buyers and sellers will leave Chicago real estate auctions happy, knowing that the deal will be completed in 45 days, whereas traditional, negotiated sales often take months.
Tags: auctions, Buy a Condo, Chicago Condo, Chicago real estate auctions, foreclosed properties, open houses