How and who can benefit from a real estate auction?

Auctions are not for everyone. As a generalization there are several reasons behind this, but I want to focus on the biggest challenge given the purposes of this discussion and that is economics.


Simply put, with the sharp decline in real estate values coupled with the large number of condo buyers during the past 5-10 years have created thousands of owners who have simply watched there equity vanish. Without equity, a successful auction is highly unlikely, unless a buyer is bringing cash to the table…….another unlikely scenario.

The most likely candidates for auctions in today’s environment are banks, developers, private equity groups and owners with little or no mortgages owed on there units.


You may be thinking that this is because auction buyers only bid low. To the contrary, real estate auctions have done historically well in both good and challenging economic times. The common perception of low balling at an auction (in my opinion), is a result of 2 factors. 1) A poorly executed pre marketing sales strategy. I cannot stress enough, how important the marketing phase of an upcoming auction has in determining outcome. 2) A lack of acknowledgment on the seller’s side in accepting current market values (in particular what many condominiums are now commanding). Some sellers are still living in the past or waiting for a rebound that is not being projected in the foreseeable future

Auction offer numerous benefits:

.Maximize your property’s visibility.

.Establishing a competitive bidding process for your property.

.Confirming a time line for selling your property (usually 30-45 days).

.Selling your property "as is" with no contingencies.

. Pre-approved buyers prior to the auction.

In our next discussion, we will take a closer look at what constitutes an effective pre marketing auction sales strategy.