The basics of Commercial Real Estate Auctions
All about Commercial Real Estate Auctions
Commercial real estate auctions are, in many ways, similar to residential real estate auctions. There are, however, some tips and tricks to keep in mind when you plan to go to an auction for investment in real estate.
Read on to find out what you need to know about commercial real estate auctions.
Types of commercial real estate auctions
When the real estate industry was integrated with technology, many changes manifested themselves. One major change came in the way real estate auctions were held.
Live auctions, or in person auctions, are the traditional method in which auctions have been held for decades. These types of auctions still enjoy the popularity which they once had.
Online auctions are, however, becoming more common as people are no longer as hesitant in making major purchases over the internet as they once were.
Formats of commercial real estate auctions
It is not necessary that all auctions will have the same format.
Reserve Auctions are relatively common when it comes to commercial real estate. A minimum price is set by the seller in reserve auctions. The winning bid cannot be below this price.
Absolute auctions do not have any minimum bid limitations and the property is simply transferred to the highest bidder.
Reverse auctions are auctions in which sellers typically decrease prices to obtain business from the buyer. In essence, reverse auctions interchange the traditional roles of buyers and sellers in an auction.
Tips for investment auctions
Having cash ready with you is a prerequisite for every type of auction. It is, however, also a good idea visit the property being auctioned when potential bidders are welcomed. These tours are, in most cases, the only time you might be allowed inside the property before the auction.
Insider bidding is also a possibility which you should be wary of. Most online auctions have fake bidders only to make you impulsively increase your bid. You should have a clear picture of what you can afford and set an estimate limit for your bids before you go to the auction.
For more information on commercial real estate and auctions, contact Nav Sidhu.