Online Auctions vs. Traditional Sales: Which is Right for You?
You may have heard a common misconception about online auctions—that they're last resort for distressed properties or properties that otherwise will not sell.
The truth is quite a bit more complex.
While foreclosure auctions do exist for these types of properties, you'll also see commercial properties of all kinds selling in online auctions—everything from class A office properties to five-star hotels. And asset class is only one small factor to consider when choosing the right transaction method for your property.
As you consider whether online auctions are the right fit for your particular property and circumstances, think carefully about your answers to these four questions:
- What is your timeline?
- What type of pricing do you want to achieve?
- What kind of negotiations are you open to?
- What is the risk of deal fallout?
What is your timeline?
Online auctions are date-certain transactions that follow a clear, structured timeline and come with a set end date. On the day you list your property, you know the exact day that it will potentially sell at auction. When you list your property for auction on LoopNet, for example, the auction date will typically be around 45 days after your property listing goes live.
Traditional transactions, on the other hand, don't come with any set timeline or deal structure. The transaction could be wrapped up in a matter of weeks, or the negotiations can extend to months or even longer.
Some types of properties and transactions benefit from having a more structured sale. For example, the auction format has proven beneficial for 1031 exchanges or properties with forthcoming loan maturities. The certainty is appealing—you know exactly when and how the property is being marketed, and when you know your sale date.
But not every transaction has a deadline. If you're willing to wait as long it takes for the market to move in your favor and allow you to sell at a certain price, then you might not choose to use an auction.
Ask yourself: do you want to sell as quickly as possible, or are you willing to wait?
| Time frame | Best Option |
|---|---|
| You're in a hurry | Auction sales |
| You have time to spare | Traditional sales |
What kind of pricing do you want to achieve?
Another common misconception is that auction properties sell at a discount, and that owners who choose auctions will not achieve competitive pricing.
It's true that there are certain types of auctions that primarily sell distressed assets and prioritize disposition speed above all else, but not all auctions operate that way.
In 2024 and 2025, properties transacted through Auctions by Ten-X achieved 95% of the median value of market comparables. These properties also sold and closed within 100 days, on average—adding further value to the deal by reducing holding costs.
The auction format is designed to help you achieve market pricing. Each seller sets a reserve price for their auction property before the auction, and the property will only sell if that reserve is reached. If the market isn't prepared to meet your price, you're under no obligation to sell at a price that you aren't satisfied with. If you're willing to wait for market conditions to move in your favor, then a traditional sale may be the option for you.
Ask yourself: are you trying to achieve the highest possible price, above all else?
| Time Frame | Best Option |
|---|---|
| If you want to reach the greatest possible sales price | Traditional sales |
| If you want competitive pricing, but also have other priorities | Auction sales |
How do you want to negotiate?
In addition to the ultimate purchase price, consider how you'd like to reach that price.
In traditional transactions, there is no formal negotiation period. You can negotiate on price for as long as both parties are willing.
In online auctions, negotiations are built into the process. The live bidding window utilizes an offer/counter-offer process to allow for negotiations within minutes or even seconds. And when the auction ends, so do negotiations.
Ask yourself: are you open to extended negotiation periods? Or do you want to complete the transaction more quickly?
| Time Frame | Best Option |
|---|---|
| If you're open to an extended negotiation process | Traditional sales |
| If you'd prefer to expedite your negotiations | Auction sales |
What is your risk of deal fallout?
This is an unfortunate truth of selling commercial real estate: there's always a chance that the deal could fall out in escrow.
Traditional deals have a contingency period during which due diligence is conducted, as well as an extended escrow period where buyers may need to secure financing. Because all of this is of a contingent nature, it can lead to a greater chance of fallout and retrades.
To mitigate this risk, auctions take the due diligence period and place it at the beginning of the deal. Due diligence is a prerequisite for listing on the Auctions by Ten-X platform, so a thorough assessment has already been completed by all parties involved before bidding has even begun. Additionally, bidders themselves undergo a stringent qualification process before they can participate in an auction. Because our bidders are confirmed to be financially qualified for the deal and have had a period to review our properties' details ahead of time, our closing process is quick and streamlined, and our chances of fallouts are low.
Ask yourself: are you prepared for the possibility of your deal falling through?
| Time Frame | Best Option |
|---|---|
| If you want certainty of close | Auction sales |
| If you're willing to risk it | Traditional sales |
Frequently Asked Questions
How do online auctions work on LoopNet?
Online auctions follow a set process comprising five key stages: valuations, onboarding, marketing, auction day bidding, and contracting/closing. A property listed on LoopNet will receive a Diamond ad and 45 days of marketing, during which potential investors can underwrite the property, view all due diligence documents, and register to bid.
Once the property is listed on the site, an auction date will be set. There will be a two-day live bidding window and, if the bidding meets the reserve price, a non-contingent closing period (typically around 30 days). In total, the average auction property goes from listing to closing within 100 days.
How do you list a property for auction on LoopNet?
You can contact your dedicated LoopNet account executive or reach out to our team to learn more about listing your property for auction.
What kind of properties are available for auctions on LoopNet?
Auction properties include office properties, multifamily properties, hotel properties, industrial properties, retail properties, medical properties, and more.
How likely is it that an auction property listed on LoopNet will trade?
Properties under contract in our auctions have a 97% success rate of closing.
How do you determine a property's reserve price?
We work with the broker and property owner to establish a reserve price that is in line with seller expectations and market comparables. The price is chosen to give you the best possible chance of selling in our competitive bidding environment.
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