Things come and go. Where others remain as mere trends that only last as long as a blink of an eye, there are a select few that become even more groundbreaking and loved as time goes by. Such is the case for commercial property auctions.
As the name suggests, these involve a type of structured bidding process where the highest bidder is granted the chance to acquire a particular piece of commercial real estate regardless if this is something one plans to use themselves as part of business operations or as the product itself such as in trading and leasing. Of course, this is given that the highest bidder can come up with their end of the bargain which would be an upfront down payment and the succeeding installments on the remaining balance.
But with a very competitive process and a platform that tends to overwhelm relative newbies, why do commercial property auctions continue to flourish?
The answer is pretty simple and we’ve got two perspectives on that too, one for the sellers and another for the buyers.
On the seller’s part, commercial property auctions are the perfect avenue when one is looking for haste and market. During sluggish seasons or in times when owners cannot make a quick enough sale of their assets, they serve as the perfect respite. For financial institutions who wish to dispose of a foreclosed property or set thereof to recover what was owed but was not paid to them, they become a solution to a time crunch and loss aversion. Even in cases such as the distribution of inheritance, they are used to sell off a property from an estate so as to make it physically divisible among multiple heirs.
Now in the buyer’s point of view, commercial property auctions can be a platform where they can score a great property at a good deal. The process may seem intimidating at first but if one looks at the closely, they come with a lot of perks too. Perhaps the biggest one would be the opportunity to acquire commercial real estate assets for a price lower than their current market value or an amount lower than what the said assets would have been traded for via traditional means and platforms.
Of course, the said perks would only be possible with the right bag of tricks. One needs to fully understand, prepare for and practice wise judgment and caution when participating in commercial property auctions.