Auctions have become a popular alternative method for selling real estate property. In an auction process, the property is sold to the highest bidder. Thus, if you wish to sell land quickly and easily, you should consider an auction process. This post looks at the benefits of land auctions for sellers.
Quick Sale
The land auction process is swift. In a typical case, a seller can advertise a land auction within a month and close the deal shortly after the auction date. The seller sets a date and provides a reserve price for the auction. Upon the fall of the hammer, the buyer will be legally bound to complete the purchase transaction. This process eliminates the delays of back and forth negotiations, which causes delays in typical land sales. In some cases, the potential buyers can enter into pre-auction negotiations leading to a quick sale before the auction.
High Competition
A land auction can generate high competition amongst prospective buyers. Usually, auctioneers market the event to increase the number of bidders. Also, an auction property does not have a price tag, attracting many buyers who do not have a specified budget. The auction process becomes competitive as the buyers fight out to be the highest bidders. Consequently, the final sale price is likely to be higher than your initial expectation. In this way, increased competition leads to a hefty profit for the seller.
Control over the Sale
In a land auction process, the seller remains in control. Typically, the fall of the auctioneer's hammer signifies a sale agreement. Thus, the buyer can no longer renegotiate or pull out of the sales deal without financial or legal implications. In comparison, buyers purchasing land through an estate agent can renegotiate at any given point until the exchange of sales contract. Thus, the auction process provides more control and certainty to the seller. In addition, the seller can benefit from price protection. In this case, the seller can set a reserve price to limit the risk of low offers.
Cash Transactions
Most land auctions involve cash deals. As such, auctions eliminate the need for third-party lenders in the transaction process. Typically, financial lenders complicate real asset deals since the borrower has to meet their terms and conditions. For example, an unfavorable property appraisal may result in a loan rejection, and the deal may fall through. Thus, when sellers use an auction method, there is a high probability of closing the deal.
Ultimately, there are many benefits of selling property through auctions rather than estate agents. Engage an auctioneer and enjoy quicker sales, higher profits, and more control in the land auctions.
Share22 July 2021
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