An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer.
What are the advantages of a reserve auction?
- If bidders do not reach a certain amount seller can withdraw the property. If seller owed more than the highest bid they would not have to come out of pocket to sell property.
- Again, an absolute auction is the most effective type of auction but not always the safest if seller has a mortgage on the property.
The most effective auction is without a doubt an absolute auction.