Commercial Real Estate Auction Companies - Things You Need to Know to Prepare For an Online Real Estate Auction

If you are purchasing a run down property, you would want to bring along a contractor and building engineer or architect to inspect the property with you so that you can estimate how much you might have to spend to spruce up the property and later

Florida, FL (prHWY.com) February 19, 2013 - Florida, Feb 19, 2013 - If you are purchasing a run down property, you would want to bring along a contractor and building engineer or architect to inspect the property with you so that you can estimate how much you might have to spend to spruce up the property and later rent out or sell. Once you have ascertained the real estate investment is good for your purchase, start asking about rental yields of property in the area and what price the agent will be able to rent out your property.

Most people think that auctions are used in distressed situations and sometimes that's true. However, they can be used for any sale. Auctions can be conducted so that the sales prices are "absolute", which means that any bid is accepted. Or the seller can determine the minimum bid that he would accept and inform the auctioneer, and the auction will be stopped if bids go below that figure. With an "absolute" auction, the seller is really rolling the dice but with an established minimum bid auction, there is protection. Absolute auctions are normally advertised as such but the established minimum bid auctions are not.

Commercial Real Estate Auction Companies - Since an absolute auction is an auction where there is no minimum bid established, the property is sold at any price! This is really risky and in my opinion, is not necessary. The alternative to the absolute auction is an auction where, although it may not be advertised, a minimum bid has been established. If, in the course of the bidding, the bids get too low the auctioneer stops the bidding. This way you have a minimum price set that you will accept for each lot and no lower. I've conducted two large auctions and they definitely are marketing techniques.

Note that generally you are more likely to encounter surprises as opposed to surprise income, so factor this into your calculations. Remember to keep some money in your bank account to take into account things like changing of tenants where a month may go by without any rental coming in and you must be able to pay the monthly bank instalments. Also take note of where in the rental cycle you are purchasing the property, a property that may be in positive cash flow now, may not be so in the next few years.


About the Author:

Commercial Real Estate Auction Companies - Fortna Auctioneers & Marketing Group is a creative, innovative, people-oriented and technologically-savvy real estate auction firm. Our work consistently delivers personal satisfaction and success, resulting in mutual pride by all parties involved in the sale.
Contact Details:
Fortna Auctioneers & Marketing Group
26 E. Main Street * Annville, PA 17003
Phone: 717.867.4451
E-mail: auctions@fortnaauctioneers.com

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