Property Auctions

Property Auctions

There are a few different types of property auctions that are popular at the moment. Whether you’re buying or selling properties, it’s a good idea that you understand all the different types of property auctions so that you know the pros and cons of each one. When you’re reading about auctions in the newspaper, online or whatever you’ll probably come across some terms such as “Absolute Auction”, “Minimum Bid Auction” and “Reserve Auction”. Some people can get a little bit confused about some of these terms, but it’s nothing to spend too much time worrying about. After you read this article you should know just about everything there is to know about the different types of property auctions.

Let’s start with an absolute auction. Absolute auctions are really popular for property auctions. In this type of auction, the property will be sold to whoever bid the most, no matter what the highest bid is. If you’re thinking about buying a property at an auction, I’d recommend that you try to find an auction that is an absolute auction as you might be lucky and get a great bargain. However, if you’re a seller I wouldn’t stay away from these types of auctions either! Since people think that they have the possibility of buying a property at a lower cost than it’s actually worth, more people usually attend the auction. This results in more bids which will increase the price of your property. So, an absolute auction is good for both buyers and sellers which is great.

Minimum Bid Auctions

Next, we have something called a minimum bid auction. The name of this auction pretty much describes what it is really. As the name suggests, the seller decides on the lowest price that they’ll accept for the property. For example, if the seller won’t accept any bids below £200,000 then the auctioneer won’t start bids at £150,000. The auctioneer will start at £200,000 and if no bids are received the property won’t sell. This obviously gives the seller some extra protection compared to some other types of property auctions. Another thing to note in this type of property auctions is that all buyers know the minimum price which will be accepted, so it’s a little bit risky since it might put some bidders off.

Finally, there’s a reserve auction. Once again, the name might explain everything that you need to know to help you decide which kind of property auctions will suit your needs the best. This time, buyers don’t know whether or not there’s a minimum price or not so they don’t know if you’ve set a £200,000 reserve which usually increases the amount of interest in the sale. Sellers have a lot of control in this type of property auctions, since they can reject the highest bid no matter how high it is. They can also negotiate with the highest bidder if they hoped on getting more for their property. This might be good for sellers, but it usually leads to fewer buyers having an interest in purchasing the property.