Online Property Auctions
Whether you are a buyer looking for a property investment or have a property to sell, you are not restricted by estate agents or auction houses. Along with those two established options, today you also have online property auctions.
While not everone's cup of tea, online property auctions are becoming increasingly popular. Just do a search for "online property auctions" and you'll pages on links to property auction websites and resources.
As a buyer, one of the main benefits appears to be access to properties that you wouldn't otherwise know about. These auctions also tend to go on for longer with round the clock proxy bidding. As a seller, it means that you reach a far larger market place, with more buyers.
One of the first things you are told when starting out as a property buyer, is to never to buy any property unseen. Excellent advice. So how come property auctions are growing in popularity? Well, among the many riskier properties, there are some bargains to be had, and if you're lucky, properties within your area that you might have missed, so don't write them off.
There are three kinds of online property auctions:
Minimum bid: Minimum bid auctions are property auctions that start at a minimum price which the seller as decided on. It's the safest option for a seller as should they only get one bid, they have already made a decision on what the least amount is that they will accept.
Absolute bud: This is the most popular of the online property auction formats. There is no minimum bid, with the property being sold to the highest bidder. While great for a buyer, this is the most dangerous for the seller. It's important to ask yourself though why the seller is so desperate to sell the property at a potential loss
Reserve bid: A minimum bid is set by the seller, along with a price which if not reached the property will not be sold. So for example, the minimum bid might be £10,000, with a reserve of £50,000. Unless the bidding goes over £50,000 at the end of the auction the property remains unsold. Also, some online auctions make all the bidders subject to confirmation, so that the seller can refuse your bid if they don't like your profile, feedback.
Some important things to consider on auction sites is understanding what constitutes a binding and nonn-binding bid, you don't want to be caught out. A binding bid is one that as it it sounds, binding. You can however back out of it should you absolutely need to, but be prepared to get negative feedback. Feedback is important in all online auction communities, and can hamper you in future dealings.
Non binding bids mean that it is easier to withdraw should specific situations arise that are predetermined on the site.
As always, always study all the rules for the specific auction site you are planning to use, and as with any kind of investment, follow the numbers.
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