How do Commercial Real Estate Auctions Work?
Commercial real estate auctions can be an excellent alternative to the typical selling process. Usually, a building or piece of land would be listed for sale and shown to buyers. The seller then waits for interested parties to present their offers.
The auction process, however, presents a building to a group of interested buyers simultaneously. Buyers can submit bids during the auction period, and the highest bid is chosen when the auction closes. Some sellers require a minimum or reserve price to be met for the sale to proceed.
Benefits of Auctions
Depending on the type of property and the seller’s situation, auctions can provide various benefits.
- Streamlined Sale Process: The auction process allows the seller to collect all bids or offers from interested parties within a specified time. As opposed to selling on the traditional market, going to auction streamlines the sale process.
- Equal Playing Field: When all buyers participating in an auction agree to the same terms, there is less chance of an offer being chosen based on agent relationships, closing and possession details, or any other conditions.
- Virtual and In-Person: Auctions are held online, in-person, or a hybrid of the two, allowing them to reach a broad audience.
- Pre-Qualifying Buyers: Often, buyers may need to give information regarding their financial situation and submit non-refundable deposits before the auction begins. Gathering these details ahead of time gives the seller an idea of who is serious.
- Transparency: Many times in a real estate negotiation, you may be aware that there are other offers on the table but not know the details. Auctions provide transparency and allow buyers to know exactly with who they are competing.
Need Help Navigating Auctions?
Don’t hesitate to contact Steve Longenecker at WeBrokerCORealEstate or 720-600-9513 with questions regarding auctions or if you have any commercial real estate needs in Longmont, CO, and our neighboring communities.
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