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Auction Purchases of Commercial Property:
Bidders Beware

May 27, 2014
Kate Lewis

Reprinted with permission from Law 360

Auction sales of real estate are nothing new, and over the course of the Great Recession, auctions in the foreclosure context became an inescapable fact of life for both the commercial and residential sectors in most of the U.S. What is relatively new, though, is the sustained use of the auction format in an online setting.

The advent of large online property auction platforms with sophisticated search features allows prospective purchasers to easily discover sellers and properties all over the country that they might never encounter otherwise — and with a little digging and luck, find some great deals.

One reason that the auction process is attractive to purchasers is that it streamlines much of the laborious process of identifying and negotiating a deal. However, a consequence of that streamlining is the loss of some leverage that purchasers often take for granted in a traditional commercial property sale.

Here are some legal and business pointers for a would-be bidder to consider when seeking out that diamond in the rough.

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