When you’re trying to sell your home or land, you might be tempted to try a traditional sale via a real estate agent. However, there is a better option. You can put your home up for auction. But first, we prepared a lot of information about the advantages and disadvantages of an auction process.
The auction process isn’t perfect. It does have some minor disadvantages, but it also brings a lot of benefits to the table that you shouldn’t ignore.
We’re going to go over 10 things you should consider before taking the traditional route. You might just end up listing your home for auction instead.
1: Pro: Set it and Forget it
If you list your home on the market via a real estate agent, you have to be involved. You’ll constantly be getting calls about every potential buyer, and you will be heavily involved in the transaction process.
With an auction, you simply list it and forget it. Everything the buyer needs to know is at their fingertips, and you don’t have to worry about walkthroughs, constant conversations about offers, etc. People bid until one wins, and then the deed changes hands.
2: Disadvantage: Fee
This really isn’t a disadvantage, but we’ll highlight why after this.
There is a $299 technology fee. So, the process isn’t free.
3: Pro: Cheaper Fees
The technology fee really isn’t a disadvantage, though. While it is an expense, it is far cheaper than all the compensation you have to pay a real estate agent. Typically, a real estate company can take as much as $15,000 just for selling your house for you.
4: Disadvantage: Potential for Failure
The vast majority of houses listed for auction are sold very quickly. However, if your home or land is in exceptionally high disarray, the listing might fail. This might also happen if you expect too much as a reserve price. A little less than 33% of homes listed for auction fail. You can minimize that chance, though.
5: Pro: Faster Selling
When you list a home with a real estate agent or for private sale, it can take months, or even years, for your home to sell. It’s simply not as visible to buyers unless you put in a lot of legwork.
An auction is different. Thousands of people interested in buying your property will easily see it, speeding up the selling process.
6: Disadvantage: No Say in Who Buys it
If you have an emotional attachment to the property, and you want to make sure it goes to a family who’s going to take care of it instead of flipping it, an auction isn’t for you. Whoever bids more wins.
7: Pro: More Profit
With lower fees and a bidding model, you can make a lot more profit on your property.
8: Disadvantage: No Solid Price
Unfortunately, you can only set a minimum price. You can’t set a price and hold firm on it. If someone bids just over your minimum price, they’ll get it.
9: Pro: Larger Buyer Market
If you list your home traditionally, only people from your area are going to see it. With an online auction, your home will be in front of investors and homebuyers from all over the world.
10: Disadvantage: You Need an Auction House
You have to be picky when picking the auction house that will host your property. Some aren’t that great. That’s why we recommend only listing your house with Auction Flippers. You can trust that Auction Flippers will highlight your property correctly, and we’ll strive to sell your home quickly and effectively.
We hope this information about the advantages and disadvantages of an auction process will help you to make the best decision!