A traditional property auction is a public sale of real estate in which interested buyers bid on the property. The highest bidder at the end of the auction wins the property. Traditional property auctions are typically used to sell properties that are in foreclosure or otherwise distressed.
The starting price for an auction is called a ‘guide price’ and can be negotiated with the highest bidder. These auctions may seem too competitive for people who are new to bidding.
The auction ends immediately upon the conclusion of an agreement, and the winning bidder has only 28 days to complete their purchase. This leaves them without enough time to secure a mortgage and access to credit, so they are likely to be reluctant buyers.
Traditional properties usually attract only cash buyers, limiting the number of potential buyers.