Auction

### What is an absolute auction? - [ ] An auction with a reserve price. - [ ] An auction where the highest bidder negotiates the price. - [x] An auction where the property is sold to the highest bidder regardless of price. - [ ] An auction organized by government officials. > **Explanation:** An absolute auction is where the property is sold immediately to the highest bidder without any reserve price. ### What essential licenses might be required to conduct a real estate auction? - [x] Auctioneer’s license and real estate license. - [ ] Only a real estate license. - [ ] Only an auctioneer’s license. - [ ] Neither licenses apply. > **Explanation:** Conducting a real estate auction usually requires both an auctioneer’s license and a real estate license. ### In which auction might the property not be sold if the highest bid does not meet a certain price? - [x] Reserve Auction - [ ] Non-Reserve Auction - [ ] Sealed Bid Auction - [ ] Dutch Auction > **Explanation:** In a reserve auction, the property might not be sold if the highest bid does not meet the set reserve price. ### How do bidders participate in real estate auctions? - [ ] Only through verbal bids. - [ ] Only online. - [x] Through various methods including verbal, electronic mail, and online platforms. - [ ] Only on-site. > **Explanation:** Bidders can participate through a variety of methods including verbal bids, electronic mail, online platforms, and more. ### What is a common risk of purchasing property at an auction? - [x] Overbidding - [ ] Finding a better deal elsewhere - [ ] Slow transaction process - [ ] Limited options > **Explanation:** A common risk in auctions is overbidding, where bidders might pay more than the property’s market value. ### What is a reserve price? - [x] The minimum price a seller is willing to accept at an auction. - [ ] The maximum price set for a property. - [ ] The average market price of similar properties. - [ ] The starting bid at an auction. > **Explanation:** The reserve price is the minimum price that a seller is willing to accept for a property at an auction. ### Which type of property sale is likely faster, traditional listing or auction? - [ ] Traditional listing. - [x] Auction. - [ ] Both are equally fast. - [ ] Depends on the property location. > **Explanation:** Auctions are generally faster since they occur at a set date and time, ensuring quick resolution compared to traditional listings. ### Real estate auctions can be ideal for what types of properties? - [x] Properties needing expedient sale. - [ ] Properties with minimal marketing required. - [ ] Overvalued properties. - [ ] Properties in top-market condition only. > **Explanation:** Auctions can be ideal for properties needing an expedient sale and where quick turnaround is essential. ### Why might some auctions require pre-registration? - [x] To verify financial ability to purchase. - [ ] To limit the number of participants. - [ ] To provide free information on properties. - [ ] To allow only experienced buyers. > **Explanation:** Pre-registration ensures that participants have verified financial ability to complete the purchase. ### Fannie Mae buying mortgages via auction is an example of which bidding method? - [ ] Verbal bidding. - [ ] Sealed bid auction. - [x] Electronic or yield bidding. - [ ] Live traditional bidding. > **Explanation:** Fannie Mae uses electronic or yield bidding, where sellers state their price or yield, and Fannie Mae accepts the highest yields offered.