It takes a lot of information and knowledge just to buy an investment property in hot markets like Florida, Arizona or Michigan. If you are just starting out, you could be sharpening your verbiage daily and trying to learn all you can about how to speak the language of real estate. One term that many might not know yet refers to a process to help sell an investment properly quickly. What is a Round Robin auction? This phrase is taken from the private auctions and has become a useful tactic to sell a property without using traditional steps to do so. Learning about a Round Robin auction can educate you with the knowledge of a way to sell your investment property when the time is right.
Round Robin Auction Definition
The gathering of investors, flippers and other people interested in buying real estate that all place private bids is what a Round Robin auction is all about. The traditional way of selling a property was to use a real estate agent or broker that added on hefty fees to the sale price. While paying someone for his or her help is normal, you don't need to be a real estate professional to sell an investment property. Creative selling methods like Round Robin auctions are becoming more popular for owners of investment property.
Round Robin Auction Process
The most traditional way to begin a Round Robin auction is by placing free advertisements in newspapers in cities near your investment property. If you have the time and budget, creating signs and posters to display near your neighborhood is also useful to attract potential buyers. An information sheet must be created and presented to each interested party that attends your public auction. This sheet describes the basics that an investor would want to know about a property before it is purchased. Things like:
• Repairs or Upgrades Completed
• Complete Address of the Property
• Recent Inspections
• Structural Issues or Deficiencies
The opening bid price should be prepared on the document that is handed to each interested person that arrives to the auction. This serves as the start of the financial bidding process and each person can bid any financial number above your starting price. The contact information for each bidder is collected on the form and bidding takes places after the walk-through and meet and greet are completed. It is customary for each auction participant that bids on the property to pay a small deposit that is pre-determined before the opening bid is established. This is used as a security deposit in case a winning bidder defaults. Most deposits are non-refundable unless a bidder does not win the auction.
The auction usually takes place by phone at a certain time, day and place. Each bidder is notified to be available at this time and has the freedom to bid as their budget allows. A buyer can get a real deal if not too many people bid or if someone drops out that was a competitor. Round Robin auctions are a great way to sell your property when you are ready to make a change. The cost savings of time and money are instantly recognizable and allow you to keep more of the money from your real estate sale.