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First of all...
Why do Auctions Work?
1. Sell your property quicker and get your money working for you.
What is your money worth? Where else could you get a better return on your investment? With auctions, any property can be sold within 30-45 days and with real estate, closing can be completed typically in about 60 days from your agreement to sell.
2. Seller controls the terms and conditions.
No time-consuming back and forth negotiations. Negotiations are eliminated, as the terms are set prior to auction. There are no contingencies such as financing, inspections and repairs that can further delay conventional sales.
3. Deal only with qualified and preapproved buyers.
Bidders at auction are required to pre-qualify and to put substantial deposits down on auction day, thus improving their performance at closing.
4. Sell AS-IS.
While well maintained properties obviously would be expected to bring a better price than a similar rundown property, with auctions you can sell a property in AS-IS, WHERE-IS condition.
5. Avoid high holding costs.
The costs of maintenance, taxes, inventory, insurance, storage and even liability are significant. A faster sale means you can avoid these holding costs. Plus, the sooner the property sells, the quicker you have money to use or invest in projects of higher returns.
6. Prices often higher than conventional.
Selling without the limitations of a fixed price permits the opportunity to sell for a higher than expected sales price. Conventional marketing sets a price and bargains down. Auctions begin at an opening bid and only go up!
7. Auctions draw attention.
You create a market for your property. Exposure is enormous compared to conventional efforts. Many times more people are exposed to the property during the "Auction Promotion." Most importantly, buyers come to you-you don't have to wait for them.
8. Urgency to buy is created.
Auctions create the psychological urge to buy this property now or it won't be available later. People know that if they want to be the successful buyer, they must bid on auction day. Tomorrow is too late. Plus, buyers feel good knowing that they paid only one bid increment more than the 2nd highest bidder thus avoiding "buyers remorse."
In today's every changing markets, auctions are not only for distressed and foreclosed properties, they are considered "a tool of first choice" by the knowledgeable seller, not an avenue of last resort. Well over 80% of real estate sold in Australia is sold using the auction method of marketing.
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