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An increasingly popular option for fiduciaries to dispose of properties that are particularly difficult to maintain or sell is via an auction. Although auctions can yield successful outcomes, they can also be a pitfall for fiduciaries and a basis for claims of breach of fiduciary duties if the auction isn’t handled properly, leading to less than desirable results.
Why Auction?
The National Association of Realtors recommends adhering to the “two-thirds” rule: out of market, seller and property, if two of the three are suited for auction, then auctioning the property will likely achieve good results.1 A good market for auction is typically: (1) either constantly changing or too dull, (2) currently lacking the specific property type (fo...
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