California Real Estate Practice Exam

The normal method of disposing of government property is by:

1. auction

2. negotiated sale

3. predetermined prices

4. sealed bids

The correct answer is: auction

The conventional approach to disposing of government property is through auction. This method is widely utilized because it promotes transparency and competition, enabling the government to maximize returns on the assets being sold. In an auction, potential buyers openly bid against one another, which can drive up the price until it reaches a market value that reflects what buyers are willing to pay. This process not only helps to achieve a fair sale price but also ensures that the process is accessible to all, providing equal opportunity for interested parties. While other methods such as negotiated sales, predetermined prices, and sealed bids are possible, they often do not offer the same level of visibility and competitive bidding that auctions do. For example, negotiated sales can lead to questions about fairness and transparency, as they lack the open competitive aspect. Predetermined prices and sealed bids can also mitigate competition and may result in lower sale prices compared to what an auction might achieve. Hence, auctions are recognized as the standard practice for government property disposal, optimizing both efficiency and public trust in the process.