As the real estate market continues to stall, people are finding more creative ways to sell their home, condo or investment property. 

And auctions seem to be gaining more popularity by the day.

Home auctions are increasing in popularity as a totally credible and legitimate way to unload a property, yet there are many more contingencies involved than in a normal real estate transaction.

An October 2, 2006 article by Marilyn Bowden of Bankrate.com, “Need to sell a condo quickly? Try an auction,” looks into the world of real estate auctions.

In a world where everything has to happen fast, fast, fast, many homeowners are getting impatient with transactions that take longer than a week! And in this market, homes are liable to sit on the market for months at a time.

That is why auctions are becoming more popular, because they offer immediate results (that is if the property sells). And if you are looking to get rid of your condo, auctions are probably the way to go.

“According to the National Auctioneers Association, residential real estate auctions represent the fastest growing sector of the auction industry. The number of residential auctions was up by 8.4 percent in 2005 and another 4.4 percent in the first half of this year.”

“Across the country, developers and owners are opting to hire professional auction houses to sell residential condominiums rather than wait indefinitely for them to sell by traditional means. There is good reason for condo owners to seek alternatives. While sales of single family homes dipped 1.6 percent in September, condo and cooperative housing sales dropped 3.2 percent, according to figures just released from the National Association of Realtors, signaling that the condo market is lagging other types of housing in a recovery.”

The first element of having a successful home auction is to advertise the event in advance to get a good group of bidders excited and ready to buy.

“Since an auction is a one-shot deal, marketing it is crucial. ‘We know a property is going to be sold 30 to 45 days from the day we list it,’ says Tommy Williams of Williams & Williams in Tulsa, Okla. ‘Therefore, we are going to spend a very serious amount of money to bring the public's attention to it in plenty of time.’”

Buyers who are looking into home auctions need to learn a few tricks of the trade before bidding and should probably sit in on a few auctions in their area before taking the plunge themselves.

“‘At most auctions, when the gavel goes down, the sale is final,’ says Alan D. Wallace, a real estate attorney in Sherman Oaks, Calif. ‘When you're buying a home by traditional means, you have a 20-day contingency period to bring a home inspector in, look at the title report and so on. But when you buy at auction, there is no contingency. That's a big difference.’”

Most of the time, buyers also have to put down a 10 percent cash deposit. Smart prospective buyers will also try and arrange for a tour of the property before they bid, although this is not always possible.

“Prospective buyers can see what the property was listed for and ask for a current appraisal and a home-inspection report paid for by the seller that shows its condition. We also open up the property for a preview so that people can come by and inspect it. They can bring their family, financial consultants, decorators or whoever they need to bring in order to make an informed decision.”