What Are the Different Types of Real Estate Auctions?

When exploring real estate auctions, you’ll find that there are three primary types to consider:

1. Absolute Auction (Auction Without Reserve)

In an Absolute Auction, the property is guaranteed to sell to the highest bidder, no matter the price.

This method often generates strong buyer interest and participation due to the certainty of a sale.

It maximizes market response and is increasingly used by financial institutions and government entities.

2. Minimum Bid Auction

• In a Minimum Bid Auction, bids are only accepted at or above a stated minimum price.
• This minimum is clearly communicated in advertising materials and during the auction event.
• Sellers benefit from reduced risk, as the property will sell for no less than the minimum price.
• Buyers have clarity on the price threshold, but the minimum must be set low enough to attract interest rather than discourage participation.

3. Reserve Auction (Auction Subject to Confirmation)

• A Reserve Auction allows the seller to set a predetermined price at which they are willing to sell.
• The highest bid becomes an offer, not a guaranteed sale. The seller retains the right to accept or reject the bid within a specific timeframe, typically immediately after the auction or up to 72 hours later.
• While this format gives sellers more control, it may deter potential buyers who are uncertain if their highest bid will secure the property.

Each auction type has its own benefits and considerations, so it’s important to choose the one that aligns with your goals as a buyer or seller.

For personalized guidance, reach out to us we can help you determine which auction type best suits your needs.