Absolute Auction Defined: An Auction where the sale price is not subject to confirmation of the high bid. At Absolute Auction, the property sells to the highest bidder.
An Auction cannot be truthfully be called an Absolute Auction if the property being auctioned, has to bring at least a certain amount. Absolute after $ 100,000 is not really Absolute. An Auction with a Minimum Bid to open the bidding is not an Absolute Auction.
Some Sellers are afraid of Absolute Auctions because they fear the property will sell for a ridiculously low price. However, Absolute Auctions bring out the most bidders and therefore the highest prices. Property will usually bring what it is worth on the Auction Date at Absolute Auction if the Auction is well advertised and well conducted by the Auctioneer.
In the event there is a loan on a property, and the property sale must bring the amount of the pay off plus the Auctioneer’s Fee, an Auction subject to confirmation is the safest way to go.
Experienced Auctioneers generally have a feel for what a property may bring at Auction. Sellers should always ask the Auctioneer’s honest opinion as to how much the property should bring at Auction. “Should Bring” doesn’t mean “Will Bring.” Since no one knows the future, no one can guarantee how much a property will bring at auction.
Auctioneers generally don’t like Auctions subject to confirmation and neither do buyers. Many of these Auctions are not successful because the confirmation price is more than the property will bring at Auction. On Auctions that are subject to confirmation, wise Auctioneers ask for the advertising fees up front as well as some amount for all the hard work that is done in preparation for, and holding the auction. Buyers tend to stay away from auctions that are subject to confirmation because they don’t want to waste their time going to an Auction where the high bid will most likely not be confirmed.
Even at an Auction that is subject to confirmation, the property may be sold at below the confirmation price, if the owner agrees to it. Sometimes, if a property doesn’t bring the confirmation price, a negotiated price may be reached after the auction, with the highest bidder normally having the first right in the negotiations. If the highest bidder will not negotiate, the negotiations may proceed with other bidders at the sale.
If a person is thinking of having an Auction, and can do it, an Absolute Auction is the way to go.
Most Absolute Auctions are highly successful.
An Absolute Auction is the quickest way, to turn Property into Cash. The property is usually sold in “as is” condition, with no contingencies, except the Seller is required to grant clear title to the property. An Absolute Auction is a guaranteed sale. The Property will be sold on Auction Day to the Highest Bidder.