Absolute Auction

If you are interested in selling your property or item in the Louisville area, you may consider an absolute auction.

  • The designation absolute is a legal statement made by the seller.  The seller agrees to sell the item, or property, regardless of the last bid amount.
  • The seller also agrees that he, and no one acting on his behalf, will bid on the item or property.
  • Because consumers know that there is an opportunity, to possibly buy at a very advantageous price, the absolute auction may have greater attendance.
  • The absolute auction often produces a greater selling price, than the public auction, due to the increased competition.
  • While the absolute auction may seem like a major risk; it is truly only the risk between wholesale and retail — what a person will pay, with the idea they can quickly resell at a profit.
  • It is not the risk of selling a $100,000 asset for $1.00.  It is often used in partnership dissolutions.  When one or more partners want to withdraw, there is a need to establish a fair price for the property.  The public establishes what the asset is worth.  Any individual partner may bid to buy but the existing partnership may not bid.
  • Financial institutions prefer this type of auction.  They preserve relationships with their customers and, often, get new or additional borrowers.
  • Attorneys and judges like the fairness, and timely resolution, produced by an absolute auction.
  • When the real property being offered has liens on it, lien holders, in most states, need to agree to the absolute auction listing.  By accepting, lien holders agree to either accept the net proceeds available to them or the debtor’s other assurances of repayment.   Usually, they are free to bid to protect their investment, using offset dollars to acquire the asset, in lieu of the funds owed them.
  • While we recommend this method, and would personally choose it, it is not for all sellers or for all properties.

What is an Auction?

Auction Professionals of Ky - Video - What is an Auction?


Victorian Home Auction
Judy Sanders

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