Real estate commercial property auctions have become very popular with people buying a house for investment or commercial purposes. This is mainly because auction commercial properties are priced below the market value. They also make for a great bargain in the housing market with the ever-rising commercial property prices.
Introduction to auctions houses repossessed by the government due to unpaid taxes and those repossessed by banks and other financial institutions through foreclosure are the main types of property offered at an auction. At other types, commercial properties might need to be auctioned because a couple going through a divorce wish to sell the home, the owner is undergoing bankruptcy and the homeowner dies and the heir to his property do not want to inherit it.
When it comes to buying a house at auction, you can consider three types of real estate investors: absolute auction, minimum bid auction and reserve auction.
Absolute auction
In absolute auctions, the highest bid will win. If you bid the highest, you will become the owner of the property. There is no minimum bid in absolute auctions and they elicit a maximum response from potential buyers and investors. An absolute auction is very popular for foreclosure auctions
Reserve auction
With this type of auction, the highest bid is considered an offer to the property seller. The property seller is required to accept or reject the bid within a certain period of time.
Minimum bid auction
There is a minimum amount that property buyers must bid to be in the running for purchasing a property at commercial property auctions. The minimum bid is usually published in newspapers or/and online real estate auction platforms.
The pros of buying at auction
Buying a property at auctions helps you avoid the usual lengthy processes of buying a property, especially if it is your first time to buy a property. As soon as the bell is rung, the highest bidder will get the property. Unusual or quirky investment properties that aren’t available elsewhere can be found through purchasing an auctioned property. If the commercial property has not generated a lot of interest, purchasing a house at auctions can get you a good real estate deal.
Cons of purchasing at auction
Purchasing at an auction has more risks than buying through the normal process. Property buyers must have knowledge of how the auction process works. Some auctions do not allow property buyers to inspect the interior of the commercial property before they buy a house at auction. Therefore, property buyers risk ending up with a commercial property in poor conditions. Another downside of auctions is that auctions can be a dumping ground for low-quality properties with restrictive covenants, short leases, unregistered properties or defective legal titles.
Finding a real estate auction
It is important to know how to find commercial property auctions if you want to buy at auctions. One of the best ways you can find real estate auctions is by making an inquiry at the local government offices. You can also look for information on newspapers and websites and follow up through a phone call or email.
