Why would you put your home up for sale at an auction?
I can’t think of any good reason.
Seriously, tell me.
From what I read in the press, the average person who puts his or her home up for sale at auction is doing so because their home isn’t selling the traditional way.
So, they hire an auctioneer.
Again, from what I read, these aren’t often very successful.
From a story in today’s Globe:
In recent months, homeowners in Nahant and Boxford have felt the bitter sting of disappointment when their homes failed to command bids that met their minimum prices.
The high bid for a sprawling, 5,200-square-foot Boxford home was $460,000, half the $900,000 minimum value the homeowners had placed on it.
In Nahant, a single bid of $830,000 was offered and rejected as too low; the homeowners had been hoping to get something closer to their original $1.25 million asking price.
The woman interviewed in the story who successfully auctioned off her home was happy, but she was selling a house she inherited – her cost was zero and her profit $450,000!
Now, the seller originally listed the house at $625,000. Might I suggest that was the reason it didn’t sell for 4 months?
Selling at auction is great for one reason – buyers think they are getting a steal. And, in the frenzy of an auction, maybe they will raise their bids higher than they would, otherwise.
One caveat – auctioned properties sometimes come with big, heavy chains of rules on them. You might not be able to back out of the deal as easily than if you bought through the standard process. You might not be able to have a home inspection. You might not be able to close when you want (the seller might demand a date convenient to him or her). And, if you end up not closing, you might very well be out your deposit. (Also, auctioneers charge as much as 10%; ten percent over the purchase price. Keep that in mind when bidding.)
Yes, I know, you’ll read what I wrote here and say, “Oh, you don’t want people to go through an auction, because you’re a real estate agent, and anybody who goes through an auction doesn’t pay a broker’s commission.”
Um, I guess. That still doesn’t answer my question.
Why would you use auction off your home? Speed dealing – By Brenda J. Buote, The Boston Globe
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