17 Apr 2018 By WengYee Loke
Auctions are a very effective method of sale. But other than distressed/foreclosed properties, did you know that auctions are good for other types of properties?
The saying horses for courses is one that is very apt when it comes to selling properties. What many people don’t realise is that a different method of sale can help along the price and speed at which a property sells. Some properties are best suited for sale by private treaty whereas others would do very well in auctions.
Contrary to the commonly held belief, auctions are not just for distressed properties or firesales. Auctions provide a transparent and open platform where the interested parties competing to buy the property on a level playing field.
Below are a few types of properties that are suitable for auction. It might even help broaden your view on what types of properties can be sold!
Properties that have tenants in place are a prime example of where sale by auction is suitable. If you are a landlord, you will be able to sell the property as is, without having to evict your tenants. This is because there will be investors happy to snap up an income-producing property to add to their portfolio.
If you have a property that is unmortgageable, selling through auction is a good idea. Many participants in auctions are cash buyers so there is no issue with financing the cost of the purchase. Examples of when a property is unmortgageable is if the property has no kitchen/bathroom, has a short lease or structural issues.
Does your property have the potential for further development? There are many builders/developers on the lookout for good value add opportunities. If you have a large house that could be divided into smaller flat units, or a property that can be extended then a competitive bidding war could be on the cards at an auction.
Similar to development opportunity as mentioned above, a parcel of land gives developers endless possibilities. Particularly in areas where there is a shortage of housing, land plots serve developers well as they know that there will be a decent amount of demand for well built houses or flats.
Auctions have always attracted those looking to use property as part of their investment portfolio. Commercial or mixed use properties will appeal to them as it helps diversify out of a solely residential portfolio.
This is not an exhaustive list of properties that are suitable for auction but it is a good starting point to show you what types of properties can sell via the auction method. With the rise in online auctions, it is now even more accessible with 24/7 bidding on the site available. Sellers also won’t have to wait for a specific day as with ballroom auctions because online auctions provide flexibility in determining the auction time period.
If you are looking to sell your property, or even if you’re not sure whether the auction way is for you, contact us and see how we can help!
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