Today, the auctions exist next to us, more than that – they are working successfully. Public sale by the established rules of antiques, cars, various things is popular in our country. Every adult citizen has the right and the opportunity to purchase an apartment at an auction.
Features of auction sales
The organizers of the auctions are large trading companies, seller associations, brokerage auction firms, but most often the auctions are organized by banks and government structures. Every public auction is held individually according to strictly defined rules, for example, tenders announced by bailiffs are regulated by law.
Technology of auction trading
There are two types of auctions by the method of setting prices:
With the price increase (English type), the winner in such an auction is the person who offered the maximum price. With a decrease in the price (Dutch type). The winner is the one who will first agree to pay the amount announced.
Both options are used at auctions for the sale of apartments. There is another kind – Internet auction (Scandinavian type). It works to increase the price and wins the bidder who made the last bid by the time the auction ends. In such events, the opportunity to bet is usually paid.
Auctions are of an open and closed type. When holding open trades, everyone sees the opponents’ bets. When the auction is closed, bids are submitted to the auctioneer (organizer of the auction) in envelopes, there is no public publicity.
Fast selling method
The auction method of selling real estate or as it is also called the “fast selling method” was developed by Bill Efros. Commonly, this method works perfectly, playing on the propensity for excitement of many residents of the country. The real estate object is put up for auction at a low price, which draws the attention of potential buyers. As a result of skillfully conducted trades, the price of it quickly rises, interested in buying persons actively increase the price. The buyer is the one who was able to beat the rest and pay the highest price.
Which apartments are auctioned?
Unfortunately, in recent years, the number of people unable to get bank loans has increased. In this regard, there have been more cases of foreclosures. Theoretically, an apartment at an auction can be purchased at a price of half the market. A variant is possible, when the prices for real estate have risen on the market, and at the auction site prices have remained the same. At auction, it is allowed to attract mortgage loans, parent capital. Terms of registration of the contract for the purchase of housing can be very attractive.
Organization and holding of auctions
The information on the forthcoming auction is placed in mass media of local significance.
The first step in the bidding is to determine the market value of the housing offered for sale. Then the bidding time will be appointed, where the property should be sold. In addition to the traditional open tenders involving the auctioneer who strikes with a wooden hammer and announces: “Sold!” there are electronic trades. To get the settlement account of the auction organizer, the participant transfers a deposit, as a rule, it is not more than 20% of the market value of the object being offered for sale. The final amount is not refundable, but goes to the payment for the purchased apartment. The remaining amount must be immediately transferred to the seller, after which the contract of sale is formalized. Less fortunate participants can return the deposit or use it in the following trades.