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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Lizzie Tudor who wrote (106069)2/21/2008 10:22:13 PM
From: Elroy JetsonRead Replies (1) of 306849
 
Sale through the MLS (called sale by treaty in Australia) is the most common method in the U.S., auctions are a common method of sale in Australia.

Each has advantages and disadvantages.

Homes which are damaged physically, or damaged economically by grossly excessive local inventory, are more often sold by auction.

The advantages of an auction are: quick disposal; showings are typically limited to a few public open house dates; REO auctions attract professional buyers from out of the area who may not be brought in by the MLS.

In Australia, homes in the city are almost always sold by auction, and homes in the country are usually sold by treaty. It's tough to sell a rural home by auction when only a few neighbors show up.

During the last downturn some banks priced their REO homes well below the market. The bank's agent for one listing told me they had received more than 500 calls from other agents during the first afternoon. The bank would accept offers for three days subject to a page of stipulations their agent would fax you. They accepted the best of seven actual offers, at a price which was close to market at the time - perhaps a little low.

Is that an MLS sale or an auction? You see the difference can become blurry.
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