Ritchie Bros. lowers gavel on condos, lakeside properties
Derrick Penner
Sun
Looking for a deal on a Vancouver Island condo, or an Interior lakeside retreat?
Buying property through an auction is one way to go.
Ritchie Bros. Auctioneers — which has sold everything from an entire residential subdivision in Quesnel, Vancouver Island condos and recreational lots on the Sunshine Coast — has more sales slated for the coming month.
“There is a good chance you’re going to get a good deal,” Ritchie Bros. spokeswoman Kim Schulz said in an interview, but quickly added that what makes a good deal is in the eye of the buyer and the seller.
Property auctions in the United States are more closely associated with distressed real estate as banks unload homes in foreclosure.
In B.C., the tactic has been used more as an inventory clearance method. Schulz said that in Ritchie Bros.’ case, the firm’s real estate sellers tend to be customers from its equipment auctions who just happen to have property they want to sell. They’re also comfortable with the company’s unreserved sales method.
“If you’re going to a real estate auction, you really need to understand, is it reserved or is it unreserved,” Schulz said.
Reserved means the seller has set a minimum price that must be met in order for the property to be sold. Unreserved means the seller commits to selling to the highest bidder with no conditions.
Ritchie Bros. may soon have company in the property auction field, though in a different way.
Maynard’s Auctioneers, a big player in estate-sale auctions, is actively shopping an auction concept to real estate marketing firms, Barry Scott, president of Maynard’s Auctioneers, said in an interview.
Scott said it is unlikely unreserved auctions will gain wider traction because there isn’t much distress in the marketplace.
“If you had a lot of ‘must sells,’ it would be more applicable,” Scott said. “But you probably won’t see downtown real estate sold at unreserved auction.”
However, he does see a role for auctions to bring a different kind of attention to real estate sales in cases where developers sell the majority of a project through traditional means, but want to quickly clear out remaining units.
“After people see what things have sold for, they are more capable of arriving at what they think the fair value is,” Scott said.
GOING ONCE, GOING TWICE . . .
Auctions can move along quickly so here are a few tips.
– Do your homework on location and price. Take advantage of any open houses the auctioneer might have to inspect the property and neighbourhood.
– Understand that the auction is a final sale, not an open house, so don’t go thinking you’re going to bid on a whim.
– Arrange financing beforehand. The auctioneer will want to see proof you can close on the purchase.
– Don’t get caught up in the frenzy. Set your budget and stick to it.
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