If your house isn’t selling, either due to a slow market or a neighborhood saturated with similar house listings, you may be looking at other options for selling your home. If you need to sell quickly, you may wish to consider an auction. While a house auction isn’t always the best choice for selling a home, especially if you’re not in a position to accept less than the asking price, it can be a good idea under the right circumstances.

Advantages of Real Estate Auctions

A home auction might be the right choice for you if you need to sell your home quickly or limit the length of the marketing period—for example, if you’ve already purchased a new home and you can’t afford to let your current home sit on the market for months. An auction can be a great way to sell your house quickly and at a good price.

Home auctions also favor the seller because they are cash-only transactions. Bidders must have the money in hand before the day of the auction, so the seller doesn’t have to worry about a deal falling through because the buyer couldn’t secure financing.

A home auction works best under the following circumstances:

• You are comfortable with aggressively marketing your home.
• You have an agent who can negotiate well.
• Your asking price is reasonable.
• Your neighborhood has a strong demand for homes.
• Your real estate agent is on board with the plan.

How to Hold a U.S. Home Auction

If you’ve decided to put up your home for auction, contact the National Auctioneers Association to find an auction house. Interview several auction houses and ask for references. Next, make sure you have the appropriate funds available for an auction. As the seller at a US home auction, you’re responsible for:

• Closing costs
• Home inspection costs
• Marketing (which generally costs one to two percent of the purchase price)
• Sellers fee (about five to eight percent of the purchase price).

Types of Home Auctions

As a seller, you have two types of auctions to choose from.

• The first is an absolute auction, in which the highest bidder of the day gets the house, no matter what the high bid is. However, the highest bid may still be well below your asking price.
• The other type of auction is a confirmation auction. In this scenario, the seller has the right to reject the highest offer of the day and suggest a counteroffer. Unfortunately, if you’re unable to strike a deal with the highest bidder, your house won’t sell and you’ll still need to pay the auction fees.