Property Auction Blog
A Blog on Property Auction
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An average of 1-3% of the value of the real estate is spent up front by either the seller, the auctioneer, or sometimes both entities for the marketing and advertising campaign to create the auction. So after all that, only a couple of bidders show up at auction: it happens. This is certainly unfair to all the parties involved and grounds for cancellation of the auction are clear.
The exact number of bidders required to create a competitive environment that will result in an auction price that is considered “fair market value” for that piece of real estate, on that particular day, is not really known. Depending on the size of the real estate, you could say five, you could say ten, a seller might say twenty. An auctioneer should note and buyers need to understand that there needs to be a minimum amount of qualified bidders in order to facilitate the auction and have a fair playing field. Anyone care to comment?
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July 21st, 2007 at 8:24 am
Going to an absolute auction that gets cancelled is really unfair to the buyer. I went to the bank, got my check, did my due diligence, wasted my time- if I’m the only one there, I should win the auction and get it for a buck!
July 21st, 2007 at 8:31 am
Brian, put yourself in the position of the seller: I carried the property, spent a lot of money on the auction, and now I find that there isn’t a market for this property on this particular day in time- is that fair. If you like the property so much, I’m sure they will be glad to sell it to you, not GIVE it to you! I agree with writer on this one.
August 25th, 2007 at 12:54 am
In this market it may sound crazy that only 3 bidders show up to a absolute auction but that can happen and that may mean that there really is NO DEMAND for that property. If you are sure that you have properly advertised and done everything in your power to get the word out and that is all that shows up then you better hurry up and finish up your day because you have the only interested buyers right there in front of you and if you wait any longer you may be down to none. I have seen 10 bidders show up to absolute auctions before and only 3-4 actually bid. It’s always a judgement call and a gut feeling that will tell you the right thing to do. After all Auctioneers are the sellers agent only and we always do whats best for our seller!!!