Compared to traditional market listings, real estate auctions offer several advantages to both buyers and sellers. Rather than keeping the property listed for an undetermined amount of time, auctions allow prospective buyers to bid on homes in a rapid, streamlined fashion. But while auctions allow sales to occur quickly, simplify the negotiation process, and cut closing costs, many participants remain wary due to myths that surround the process. To help illustrate the advantages of this unique way to sell a home, here are a few common misconceptions about real estate auctions—and the truth behind them.

5 Real Estate Auction Myths & The Truth Behind Them

1. All Properties Are in Poor Condition

While some auctioned properties may be foreclosed or carry a tax lien, it doesn’t mean they are in poor condition. In many cases, perfectly acceptable homes are auctioned simply because a fast sale is preferred or market conditions are slow.

2. Only Experienced Buyers Can Participate

First-time buyers may be reluctant to participate in a real estate auction due to the notion that only experienced investors can successfully bid on properties. However, auctions are open to the public and can produce successful results for any buyer who has enough cash to make a deposit.

3. There’s No Inspection

Although bidders may be purchasing a property at an auction, it doesn’t mean they have no insight on the actual home. Often, auction companies will arrange open houses so buyers and their inspectors can evaluate the property. Inspection documents may also be available through the auction company.  

4. Purchase Price Must Be Paid Upfront

Apart from county or judicial sales, real estate auctions do not require buyers to have the entire payment on hand. Typically, bidders must have enough cash to cover a deposit, which usually ranges between 10 and 20%. If the buyer is taking out a loan, pre-approval documents from a lender may be necessary.

5. Sellers Lose Money

While sellers pay fees to auctioneers, they aren’t losing out on money that could be obtained through a traditional sale. In fact, sellers may save money, as they don’t have to worry about any of the marketing efforts or sit idly during drawn-out listings. Final bids also reflect the true market value of the property—a figure that may actually be higher than what would be achieved through a traditional listing.

If you’re looking for a different way to buy or sell a home, Greenway's Real Estate & Auction is a leading resource for real estate auctions in the Virginia and West Virginia regions. With offices in White Sulphur Springs, WV, and Covington, VA, our experienced team will walk you through the entire process with ease so that you can remain confident about your transaction. To learn more about our current listings and upcoming auctions, visit our website or download our new mobile app. You can also call our team at (540) 962-1155 if you’re ready to Let Greenway’s Do It!