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Monday, 18 January 2016

Real Estate Auctions: The New Trend in Real Estate

Jeff Adams Real Estate
You’re walking by a street and you see a huge crowd gathered in the lawn of a plush property, replete with a magnificent home. You wonder what the noise is all about and also what are all these men in suits and ties doing there on a sunny afternoon. You can feel the energy in the air as everyone gathered there holds and releases their breath at the same time. Then you see a man seated right at the front facing the crowd and he proclaims loudly, “SOLD!”

It then dawns on you that a public auction has just occurred, selling that magnificent property to the highest bidder. Now, you probably seem interested in the game too; however, you need to have a depth of knowledge in the field of real estate investing and real estate auctions before you step into the turf.

When Does a Real Estate Auction Occur?
That’s one question that you are bound to ask especially because you may wonder, why not use personal selling or put up an ad in the newspaper to sell property and do it without much hassle of a public auction?

Real Estate Auctions occurs in the following scenarios:

1. When Government land and property needs to be sold
2. When an abandoned property has been sitting still for a long period of time
3. When a land owner’s property is seized from him due to a judgment passed in the court of law
4. When the owner of the property is unable to repay his loan, the pending loan amount is recovered by auctioning off his property
5. When joint tenants of a property disagree on the property partition, the property is auctioned off and the money is equally divided.

Each of the scenarios mentioned above determine the rate at which the real estate property will be sold for. For example, a foreclosed property, that is when property gets taken away from the owner who is unable to repay his loans, is usually much less than the market value of the property, because the opening bid is a sum total of the pending loan amount, interest accrued and legal fees involved in the process. However, it is also possible that, if the loan amount is much higher that the value of the property, the property will be sold for a rate that is higher than the marker value.

In the other scenarios, the opening bid begins with the market value of the property.

The Benefits of Real Estate Auctions

For the buyer, the biggest benefit is that the price of purchase is decided by you. Also, foreclosures are a good investment because of lower purchase prices. The process of a public auction is fair, competitive and gives every buyer the equal opportunity to participate in it.

Since the public auction is open to all and takes places in full view of the public, a prospective buyer does not have to be worried about being cheated by the seller in any aspect such as not handling over the papers on time, or delaying the possession of the property.

For the seller, disposing off a property through real estate auctions is quick, there is no negotiation involved and he/she also saves the time and money involved in marketing and advertising of the property.

For both the buyer and the seller, real estate auctions save a lot of time as the process is quick and usually the property is sold within minutes.

When You Don’t Win a Real Estate Public Auction

Real Estate Public Auctions are like a race; while one is bound the win, the others will lose. The best way to handle loss is to keep emotions at bay because the excitement can overwhelm you and lead you to bid an amount that you possibly cannot afford. Therefore, the best way to handle such a situation is coming prepared for the auction by deciding on a minimum and maximum bid.

When You Win a Real Estate Public Auction
Winning a real estate auction is quite good news because you have earned yourself a good investment and you can now use the property either for yourself or to re-sell it when the market price increases or either put it up for rent. Either way, you are bound to benefit from your purchase.

When the auction is closed at your bid and you complete the necessary paper work after making your final payment, the property then comes to belong to you.

The uncertainty mixed with the fact that you are in charge of the purchase/selling price makes real estate auctionsthrilling. Therefore, you are either bound to strike a good deal, or none at all, making it a no loss no gain situation.