Minimum Bids, Reserve Auctions & Absolute Auctions
Real estate auctions are the all the buzz these days, and there is a lot of auction vocabulary that can easily confuse people who are unfamiliar with the process. Given that the LFC Group of Companies has been conducting auctions for over 30 years, we decided to do a series of posts that can help clear up any confusion or misconceptions about auctions.
This is the first post in our series, Using Online Auctions. Today, we’re going to quickly summarize several different types of auctions.
1. Absolute Auction/No Reserve
- With an Absolute Auction, there is no reserve price, and the seller is obligated to accept the highest bid, no matter what the amount.
2. Minimum Bid
- The Minimum Bid is the least amount that you may initially bid for a property.
3. Reserve Auction*
- A reserve auction means that the seller has the right to accept, reject or counter the highest bid if it does not meet their reserve price. Note that the minimum bid is not always equal to the reserve price.
*On our online real estate auction website, FRE.com, the most common auctions are reserve auctions with minimum bids.
If anything is still unclear about the minimum bids, my post about lower minimum bids in our Ft. Lauderdale Auction might help further explain this integral aspect of online auctions.
Coming Soon: Be on the lookout for our next post in this series: debunking the myth that online auctions are only for distressed homes.
