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Houses' values are often heavily tied to the personal needs and desires of prospective buyers. People are going to work in different places, they might favor one school district over another, they might desire more or less space, hate the style, and on and on.
An auction takes place immediately and if the people who are the best fit aren't present, the selling price will correspond to the lower end of the market value, because the buyers don't consider the specifics of that house to hold the value that they would to exactly the right prospective buyers. It's better for the owner to hold out for the right buyer than to just get it sold quickly.
It's also hard for people who are moving to be present at an auction, when it could be in a completely different state, at which point they would need a lawyer to advise them based on the laws for that state and so forth.
Furthermore, almost no one pays cash for houses, and so they would have to finance it, so an auction scenario would require either paying cash (which would cut the market size) or extending credit to people who are unqualified to borrow the value of the house. Normally a bank has to approve a loan at the selling price of the house before the purchaser could buy it, so the auction process would be drawn out which bidders continually go back to their banks and see if they'll be loaned enough money to buy the house.
An auction takes place immediately and if the people who are the best fit aren't present, the selling price will correspond to the lower end of the market value, because the buyers don't consider the specifics of that house to hold the value that they would to exactly the right prospective buyers. It's better for the owner to hold out for the right buyer than to just get it sold quickly.
It's also hard for people who are moving to be present at an auction, when it could be in a completely different state, at which point they would need a lawyer to advise them based on the laws for that state and so forth.
Furthermore, almost no one pays cash for houses, and so they would have to finance it, so an auction scenario would require either paying cash (which would cut the market size) or extending credit to people who are unqualified to borrow the value of the house. Normally a bank has to approve a loan at the selling price of the house before the purchaser could buy it, so the auction process would be drawn out which bidders continually go back to their banks and see if they'll be loaned enough money to buy the house.
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