What are the advantages to the buyer in an auction situation?
- Buyer knows the seller is fully committed to sell.
Auction agreements obligate the seller to transfer title to the highest bidder in an absolute auction; the auction agreement obligates the seller to transfer the title to the highest bidder that meets or exceeds the reserve price in a non-absolute offering.
- The buyer knows he/she is getting the property at a fair market price.
The buyer feels comfortable with the purchase knowing that there is a contending bid just one increment under the purchase price.
- The buyer has negotiating power.
The buyer can withdraw from the bidding at any time until the gavel falls.
- The buyer sees many offerings in the same place at the same time.
He is able to make market comparisons quickly and easily.
- Buyers set their own purchase price.
- Auctions elimate sometimes long negotiating periods.
- Auctions reduce time to purchase property.
- Buyers do not have to worry about contingencies because purchasing and closing dates are known.
- Buyers know property owners sell at lowest price possible.
- Buyers can receive favorable financing.