Auctions gaining acceptance in Downtown Minneapolis Minnesota as way to sell real estate

Home

Articles

Home Buying Process

0 votes

January 17, 2009, by Mike Weiland in Home Buying Process

Real estate auctions were once considered to be the last resort to unload unwanted junk properties onto an unsuspecting public. With the addition of broader portfolios and better marketing, however, the use of auctions is now gathering momentum in Downtown Minneapolis Minnesota as an alternative sales tool in the real estate community.

One recent Sunday afternoon in Santa Clara, Calif., Maria Hagan of Dividend Development Corp. sold $8.2 million worth of real estate in less than two hours. But there were no real estate brokers, for sale signs or multiple listings--and the only fast talking was done by an auctioneer.

The Santa Clara-based development firm put 50 townhouses of the 103-unit San Tomas Court project on the block. Homes in the development had been selling for $169,500 to $215,000 through conventional real estate brokers for the last year. There was no minimum bid for the auction, which attracted 1,000 people, including 450 registered bidders.

Real estate auctions in Downtown Minneapolis Minnesota are not a very common way to sell real estate. However, we could see more auctions in Edina Minnesota soon. One reason is that foreclosure rates—the traditional reason for real estate auctions—continues to be an issue in all communities. But there also is a new breed of auction--offering new, often high-priced properties--that is gaining favor among developers and consumers alike.

The new breed of auction begins with weeks of advertisement on television and radio and in newspapers. Glossy brochures and fliers are part of the sell, and the day itself has a party atmosphere, replete with catered buffets and live music.

Though real estate auctions are more common in the Midwest, the new style of auctions is a Downtown Minneapolis Minnesota phenomenon. The public really likes buying at auctions. There's a certain equity that comes from selling in an open forum--you feel good about what you just bought because you know there's someone else out there who was ready to buy it for just $1,000 less than you.

Although buyers do have a chance to purchase property for far below asking price, experts say that, on average, the price paid for real estate at an auction is usually market value. That fact doesn’t protect you from overpaying for a property at an auction. Keep in mind that auctions are inherently multiple offer situations. Whenever there is more than one buyer interested in a property, the bidding process pushes the purchase price higher than it would otherwise go. A real estate agent is still an important player in the auction process. They can help you determine value and help you develop a maximum price to protect you against the emotional atmosphere that works in favor of the seller in an auction setting. Auctioneers are beginning to understand the value of real estate agents assisting buyers and are offering compensation to agents.

Another fact to be aware of at real estate autions is when the auctioneer hammers the gavel and yells "sold!" the property may not necessarily be sold at that price. Take a look at this video for one of the little-known realities of auction buying.

In the Midwest, it's more common to auction individual houses…especially in rural areas. Homeowners in Downtown Minneapolis Minnesota rarely use auctions--except occasionally for tough to sell homes and poorly located lots.

Developers are attracted to auctions because they represent a quick way to liquidate remaining units in a large project after the initial sales momentum has worn off.

During real estate auctions, bidders are usually pre-approved: They tour models, inspect partially completed dwellings and assess how much they are qualified to borrow.

While banks and other institutions with foreclosed property on their hands and developers looking for a quick turnover are the usual source for auction property, individual home sellers can put their homes up for bidding. This can be done by contracting an auctioneer to sell the house as part of a larger auction, or by auctioning the house by itself.

There is a lot of free information available to you about buying, selling or investing in Downtown Minneapolis Minnesota real estate. For complete information about the Downtown Minneapolis Minnesota real estate market including current homes for sale, property values, and more please visit the most complete website dedicated to everything Downtown Minneapolis Minnesota real estate. So please feel free to contact me with any of your real estate questions and I will me more than happy to answer your queries. Call 612-735-6834 or email mike@mikeweiland.com right now!