Residential Real Estate Auctions

In this third post of our series on Using Online Auctions, I will discuss why online real estate auctions are a superior marketing tactic compared to traditional outcry auctions. The LFC Group of Companies is in a unique position to address this topic, having spent the majority of the last 30 years auction residential real estate, commercial property and land through an outcry format. However, after recognizing the shifting trend in commerce, LFC left outcry auctions behind to begin auctioning property exclusively online in 2004.

Here are a few reason why the outcry auction format falls short and why online auctions are the new industry standard:

• The Internet has a global reach, yielding the broadest possible market exposure.
• Bidders never need to leave home or work to attend the auction.
• Online auctions offer a fair and transparent process.
• All documentation can be downloaded electronically.
• LFC’s online auctions typically run 30-45 days, allowing all interested bidders to take their time and make an informed decision before placing a bid.
• Using the Internet as an open information source allows bidders to decide a property’s true real estate value for themselves.
• People are increasingly comfortable making purchases online.
• And best of all, no auctioneers are yelling and pressuring you as deliberate on one of the biggest financial decisions of your life.

Previous Posts in the Using Online Auction Series:

• Minimum Bids, Reserve Auctions, & Absolute Auctions
• Using Online Auctions: Busting the Auction Myth
• Reaching Tech-savvy Buyers

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 quicklysummarizeseveral 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 bidfor a property.

3. Reserve Auction*

• A reserve auction means that the seller has the right toaccept, 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.