COHEN ON REAL ESTATE

Commercial Real Estate Auction FAQs

Frequently asked questions about commercial real estate auctions, bankruptcy sales, and distressed assets.

Below are the most common questions about commercial real estate auctions, including pricing, timelines, and what to expect throughout the process .

What is a commercial real estate auction?
A commercial real estate auction is a structured sales process where qualified buyers compete for a property within a timeframe.

Multiple buyers bid in a process that establishes market value through competition.

How does commercial real estate auction work?
✓ property evaluation
✓ Marketing campaign
✓ Buyer registration
✓ Competitive bidding event
✓ Contract execution
✓ Closing

Will my property sell for less at auction?
No.
Auctions don’t reduce value. They reveal market value through competition.
Instead of negotiating with one buyer, multiple buyers compete in real time. That’s what determines the final sale price

How long does the auction process take?
Typically 45 days from launch to contract, followed by a 30-day closing.
The timeline is defined upfront, which creates urgency and drives participation.

Who pays the fees?
In most cases, the buyer pays the fee.
This means the seller can access a full marketing and sales process without upfront cost.

What is a reserve price?
A reserve price is the confidential minimum a seller is willing to accept for a property.
If bidding does not reach the agreed reserve, the seller can choose to accept, negotiate, or decline. The seller is not obligated to sell the property.

Can I set a minimum price?
Yes.
This is done through a reserve price, which is a confidential minimum amount set before the auction. We will guide you on reserve price.

How can I get reserve pricing?
If you’re evaluating a sale and want guidance on pricing or whether an auction makes sense for your property, Submit Property for Review.

Are buyers qualified?
Yes.
All bidders must:
✓ Register in advance
✓ Provide proof of funds
✓ Provide a Credit Card for $10,000 deposit
✓ Agree to the auction terms
This ensures only serious buyers participate.

What types of properties work best?
Auctions work across all asset types, including:
✓Industrial
✓Retail
✓Office
✓Multifamily
✓ Land
✓Distressed assets
They are especially effective where pricing is unclear or time matters.

Is this only for distressed properties?
No.
While auctions are highly effective for distressed situations, they are also used for stabilized and performing assets.

Many owners choose auctions because they create certainty, speed, and competitive bidding.

How is the final price determined?
Through competitive bidding.

Qualified buyers place bids in real time under a structured process. The highest bid wins and determines the final sale price.

Can I still use my broker?
Yes.
We work alongside brokers. Auctions enhance the sale process and provide another tool for creating competition and accelerating timelines. They don’t replace broker relationships.

What happens after the auction?
The winning bidder:
✓ Signs a non-negotiable purchase agreement
✓ Posts a deposit (typically around 10%)
From there, the deal moves to closing.

How quickly do deals close?
Most transactions close within 30 days after the auction.

Is financing allowed?
Most auctions are structured as all-cash to ensure certainty.
In some cases, financing may be allowed depending on the structure.

What if there are no bids?
Proper pricing, marketing, and targeting are designed to prevent this.
If it does occur, the seller retains control and can evaluate alternative strategies moving forward.

Can I accept an offer before the auction?
Yes, depending on the structure.
Some campaigns allow for pre-auction offers.

How are buyers notified about an auction?
Through a combination of:
✓ Email campaigns
✓ Targeted outreach
✓ Broker networks
✓ Platform exposure
The goal is broad, qualified visibility.

How do I know if my property is a good fit?
That’s the first step.
We evaluate the asset, market conditions, and your goals to determine if an auction makes sense.

Are auctions transparent?
Yes. All bidders operate under the same terms, and the process is structured and documented.

Why are auctions used in bankruptcy?
Because they create a clear, defensible process.
They show:
✓ Market exposure
✓ Competitive bidding
✓ How the final price was determined
This is critical in court-supervised transactions.

What is the difference between an auction and a traditional listing?
Traditional listings typically involve negotiating with one buyer at a time over an extended period.
Auctions create a defined timeline where multiple qualified buyers compete simultaneously.
This often result in greater competition, faster price discovery, and increased certainty.

Still have questions?