Introducing Reo Auctions To Banks
Introducing online REO auctions to banks brings along many frequently asked questions
. You may or may not have heard of online auctions for real estate before, but this method is the best for buying and selling all kinds of real estate, both commercial and residential. There are many benefits to selling residential and commercial property at online auctions. If you are interested in participating in one, here are some of the common questions that people have and the answers to them.
1. Are REO auctions good for all types of assets?
A bank with any type of assets on the market should consider online auctions, especially because they need certainty of closing within a short time frame. From office to retail to multi family properties, auctions are a great way to move many types of property.
2. As a broker, how do I convince a bank that an online auction is the way to sell?
Probably the most important thing for banks to know is that auctions create deadlines. Auctions motivate buyers to get active and move on the property they are interested in because of this deadline, especially in a stagnant market. There is a limited window of opportunity to obtain a particular property, and buyers will bid up the property to the highest price possible during an REO auction, or any property auction for that matter.
3. I know it is important to set a low starting bid, but how do I stress this to bank representatives?
The most successful REO auctions are those with a large amount of bidders participating to bid up the value of a property. The best way to generate a large pool of bidders is for the bank to set that low starting bid. In fact, the best online auction sites recommend that the starting bid be set at no more than at least one half of the original asking price.
4. What can I tell a bank who does not trust that buyers are going to be serious about purchasing property in an online REO auction?
The easiest and most effective way to dissuade casual bidders from acting on a property is to require a Winners Deposit at an amount that is set by the bank. Those who do not win the auction will get their deposits back, but the deposit for the actual winner is non refundable to ensure that only serious bidders participate in the commercial online REO auctions.
by: Phoenix Delray
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