Property Auctions >> Property Auction Blogs >> Property Auctions: October 2008

Property Auction Blogs

What is a multi-property auction?

For a past few years many auction companies are conducting multi-property events that contain tens or hundreds of properties. First only residential auction enjoyed the multi-property auction but now commercial auction events are getting bigger. Multi property auction means a group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers. Many sellers are finding ways to sell their property, due to foreclosure problems or due to their property being stagnant in the market. Multi property auction is also called as multi-seller auction. In multi seller auction properties are owned by many sellers, offered through a common promotional campaign are auctioned in a single event. Mostly this type of auction takes place in UK.

Dutch auction

In this type of auction, buyers place a bid amount they are willing to buy. In Dutch auction the price of the property is lowered until it gets a bid. The first bid made is the winning bid and results in a sale, assuming that the price is above the reserve price. This is in contrast to typical options, where the price rises as bidders compete. Many police auctions are also conducted this way. Dutch auction starts with a high price that keeps going down until the item sells. This is opposite to regular auction. Dutch auction is a type of online auctions that has become popular over the past few years. An online Dutch auction gives the seller the opportunity of listing the items only once rather than having to pay for several postings.

English property auction

property auction, the property is placed up for bid and seller generally sets a reserve price. Reserve price means the property has a minimum selling price and is not known to bidders. If the auction begins below the reserve price and the auction price does not go beyond that then the property is not sold and so the transaction is not completed. After the reserve price is set, the bidding starts at a price determined by the seller. With online auction, the seller or the auction site will tell the time the auction will last. When the auction ends, the highest bidder is named the winner. English online auction can be complicated by sniping and proxy bidding. Snipers watch the auction for a number of days and do not place an order because they do not want to increase the price. On the last day, when the bidding is ending snipers will tell the price. Proxy bidding means even if the bidder is not an active participant in auction he sets a maximum bid amount in order to continue bidding. In English auction the bidders increase the value of the item because they are overly enthusiastic. The bidders desire to win the auction makes the bidder to go far beyond an items value. This can benefit the seller.

What is an REO?

REO is an abbreviation for real estate owned properties. Certain definitions of REO are properties acquired by lenders through foreclosures or deeds in lieu of foreclosures. If the property is not sold at auction, it becomes real estate owned by the lender or bank. A class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.

If the property is not purchased at the trustee sale, then the home becomes an REO property, owned by the bank. The homes are not sold in a trustee sale because it is not considered a good investment for a real estate investor. A home that has been foreclosed and has become the property of the bank, a realtor is hired by the bank who will sell the property in the market. The lender will remove any liens on title, and clear all the issues that may slow down the sale of the property. Lenders want to sell the property as soon as possible, because they are in the business to lend money and not owing real estate. REOS tie up their capital reserves and hamper their ability to lend money.