A land auction is the process of selling land to a qualified bidder. Land auctions generally do not include property. Auction types include Minimum Bid, Absolute and Published Reserve.
For those seeking to purchase land at an auction, understanding the different types of auctions is important to ensure the most positive outcome.
A Minimum Bid auction indicates that there is a minimum bid amount allowed during the auction. Instead of bidders setting the opening bid, the auctioneer starts the auction at the minimum bid amount. Once a bidder has offered the minimum bid, the auction continues and the land is awarded to the highest bidder.
Published Reserve auctions have a reserve value, which means the seller has a minimum acceptable amount for the land. Bidders can start the bidding where they choose, but if the auction ends and the highest bid is below the reserve, the seller has to right to accept, reject or counter the winning bid.
An Absolute auction does not have a minimum bid or a reserve, and bidders can start the bidding. The land is awarded to the highest bidder. Absolute auctions tend to attract the most attention. All types of property - commercial, residential, and open land - are quickly sold at auctions.