We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are House Auctions?

By Trent Burkholder
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

House auctions are events where real estate is offered for sale in a competitive environment. An auction is a way of selling something where potential buyers, called bidders, simultaneously make offers on an item until a time limit or the highest price is reached. Real estate is often auctioned when a government agency or lender has foreclosed on a property and wishes to recoup as much of the money as possible in a short period of time. Laws may vary by region or country, but both an auctioneer’s license as well as a real estate license may be required to hold house auctions.

With house auctions, a licensed auctioneer generally gives multiple buyers a chance to compete for a property by placing bids. Usually a reserve price, which is the lowest price the seller will accept, is set for the property being sold. This amount typically is not revealed to the potential buyers in the auction. In a verbal auction, the buyers gather at an agreed upon location and take turns making bids, led by the auctioneer, until one person is left as the highest bidder. In this type of auction, the remaining bidders often are offered a last chance to beat the highest bid, and if they are unwilling to do so, then that bidder wins the auction.

Other types of house auctions are in the form of silent auctions, also known as a sale by private treaty or sale by offer and acceptance. In this form of auction, the buyers are normally given a chance to inspect the property being offered, and then make a bid in writing to the seller. The buyers typically are not aware of each other’s bids, and the winner is simply the person with the highest bid, with no back and forth attempts to top each other.

In both forms of auction, the highest bid must normally exceed the reserve price set by the seller in order to win. After the highest bidder is determined, they are usually required to place a deposit on the property, generally around ten percent of the purchase price. The remaining money is paid to the seller at the settlement of the property.

The most common reason for house auctions is that a property has gone into foreclosure or has been seized by a lending institution or a government agency. Since these organizations are not real estate agents, they typically need a third party to sell the items for them, and they often combine many properties into one large auction. In general, their goal is simply to break even or get as much money back from the defaulted property as possible. House auctions can be appealing to buyers because there is the potential for very good deals on real estate, but significant research is recommended, and the buyer normally must have financing lined up ahead of time.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.