In the past, whenever people thought of auctions it was always in a way that hinted of getting rid of a deceased person’s belongings.  Today, however, they have become a very popular method of home sales.  Typically, the auctioneer does want to see equity in a home before they’ll agree to sell because once the gavel comes down, there’s no changing that sales price.  Homes up for auction are offered AS IS, Where Is, and must close within 30 days of the sale. 

About a year ago, a client of mine who used to work in the circus (no, seriously) decided she wanted to live near her daughter in another part of the state.  She needed to sell her duplex fast, she had a lot of equity, and since she was 200 years old, she didn’t want to make any repairs prior to selling.  She was the perfect candidate for an auction, so I scheduled an appointment, and she agreed to give the auction route a try.

Within three weeks, we were sitting in her front yard watching the crowd of investors.  Our auctioneer was funny, entertaining, and knowledgeable.  He knew how to work the buyers to the point that she made about $15,000 more from the sale than she would have through a regular listing.

When owners consider selling through auction, they do have the right to name a minimum sales amount (or reserve) so no smart aleck can bid $50 for a $50,000 property (and get it).  I saw someone make an offer like that before and the auctioneer just laughed at the potential buyer – he didn’t even accept the bid.  If an owner doesn’t name a price, it is an absolute auction.  Wiki outlines the types of auctions here.

In Florida, condo auctions are all the rage but there are those who think people are still overpaying for the units.  So be careful if you decide to buy at auction.  Find an agent about a week ahead of the auction to run an analysis of the market to be sure you don’t get carried away and overbid on a property.  Be prepared to bring 10% cash (or check) at the auction typically required for a down payment.  And get prepaproval so you can close within 30 days.  Good luck!