Online counterbidding, an industry-wide practice, is perhaps one of the most misunderstood activities that occur in auctions today.
Auction companies conduct online counterbidding to bring the price closer to an amount that is acceptable to both buyers and sellers.
Imagine finding a craftsman-style bungalow that is being auctioned online. You discuss it with your family and submit a bid of $195,000. The seller, however, knows that the property is worth $250,000 based on comparable sales and won’t accept less than $200,000 because that is what’s owed on the home. If no one counters and the auction company doesn’t intervene, the home will not be sold and both sides will be disappointed.
If, however, the auction house counters at $198,000 and you counter at $200,000, then the sale can take place and both parties will achieve their goals. You will be satisfied because you purchased a home for less than its estimated value and the sellers will be happy because they sold the property and received the amount necessary to recoup their costs and repay the loan.
Acting as a helpful go-between, Auction.com counters on behalf of sellers until the bidding reaches the reserve price or minimum that the seller will accept. At that point, we stop bidding and buyers can then decide whether they want to bid higher.
We work hard to be more than just a listing platform for our buyers. That means helping you find the right investment from 30,000+ properties on our site and when you find one that you like, we help with the research, bidding and closing so you can experience a smooth transaction. After all, we want you to buy a property that fits your investment strategy, so we can help contribute to your success.
The information in this blog post is being provided for informational purposes only and not for the purpose of providing legal or real estate investment advice, and no liability is assumed by Auction.com LLC with respect to such information.
