Some scholars argue that the very first auction occurred when his brothers sold Joseph of the Many-Colored Coat into slavery. However, the first generally accepted history of the auction profession dates back to the Romans about 500 BC where the auctioneer would publicly liquidate property and sell soldiers spoils of war. In fact the word ‘auction’ comes from the Latin ‘auctus’ which means ‘to increase’.
Today auctions are commonplace to sell all types of personal and real property – including art, antiques, collectibles, natural resources and debt. Recently auctions have experienced positive images as an efficient and productive method to market and sell high-end, non-distressed real estate. In fact, real estate auctions are the fastest growing segment of real estate sales in the United States. According to the National Association of Realtors®, by 2010 30 percent of all real estate transactions will be the result of auctions. Here is why:
SELLER BENEFITS
- The auction process makes real estate essentially a liquid asset since a sale can be consummated and closed in as little as 60-90 days.
- Competitive bidding by pre-qualified buyers assures that a property will sell at fair market value.
- It eliminates long-term carrying cost, including interest expense, taxes, maintenance, security expense and lost opportunity.
- Auctions eliminate the lengthy negotiation process by establishing a definite timeline for when the property will sell and close.
- An auction showcases your property capturing the buyer’s interest at the expense of all competing properties in the market area.
BUYER BENEFITS
- The auction process ensures the buyer that the seller is committed to sell the property on auction day.
- The buyer by participating in open, competitive bidding determines the purchase price.
- It eliminates long negotiation periods.
- The auction process reduces the time to purchase property since the sale and closing dates are known.
- At the auction buyers know they are competing fairly and on the same terms as all other buyers.
