When most people think of a real estate auction, they envision distressed properties being sold by banks and other financial institutions to recover lost money. The perception of real estate auctions has been largely negative, especially when considering the involvement of the banks and the types of properties up for sale.
But things are changing.
E-auctions are auctions that are held online and offer quicker, more profitable property sales. Aside from these benefits, e-auctions have a lot less headache, hassle and effort tied to them. Let’s talk more about how e-auctions are different from traditional auctions and how property buyers can benefit.
How E-Auctions Work
Up until recently, banks opened up physical auctions of distressed properties to interested buyers. Buyers were alerted by newspaper advertisements or direct mail, and a venue was chosen based on how many serious buyers there were. The limitations of these types of auctions were always the same: it was difficult to generate a lot of awareness, and sales were less than expected.
E-auctions are changing the way that real estate gets into the hands of buyers. Using real estate portals, the date and time for the auction is announced, and information is provided by the sellers. Each seller is required to submit information on the property, such as its title deeds, minimum prices, photos, videos and other legal factors. This way, buyers can make informed decisions.
How Property Buyers Benefit from E-Auctions
Property buyers benefit from e-auctions in a number of ways.
● No location limitations. Since e-auctions are held online, buyers can participate no matter where in the country they are. This lets investors take advantage of properties in other cities that are good investments.
● Transparency. Every property is an investment, so it’s important for buyers to feel confident about it. Online auctions are transparent, as developers, online institutions and banks must provide all information about the property.
● Variety of Properties. Forget the old days when only foreclosed properties were sold at auctions. E-auctions allow investors to purchase new construction homes instead of old homes.
● Attractive Pricing. A final benefit is the appealing price points for the properties. E-auctions discount property prices because of the lowered operational costs and convenience for developers.
If you’re ready to attend an e-auction and start buying real estate in a new and refreshing way, reach out to First Equity Funding to get the money you need. With our flexible hard money loans, you can be a competitive buyer and make a sound investment.