WHY
USE AUCTIONS
Selling real estate at auction is no longer looked at as
a last resort.
All across the country, real estate professionals as
well as property owners are increasingly turning to the
auction method of marketing as a strategic sales tool.
The first step is to properly qualify your situation as
a potential auction scenario, or call us at
1.877.846.8444
and we'll qualify you, if your situation is qualified
then you have an excellent chance at turning over your
property very quickly.
Auctions offer property owners new options, it exposes
the property to a wide market of potential buyers, and
helps turn the property into cash faster than
traditional real estate sales.
The Two-Thirds Rule
Unfortunately, not all properties should be sold at
auction, but certain properties and situations will
benefit greatly. A dependable way to determine whether a
property lends itself to auction is this: If two of the
three main components of a transaction (Market,
Seller and Property) lean favorably toward auction,
then it should be offered for sale at auction.
Here's a checklist to figure out if the Two-Thirds Rule
applies to your property:
MARKET
Do these characteristics describe the market?
· a changing market
· a dull market -- too much product but with
buyer interest
· not enough of the particular property type
(unique, lake front, etc.)
· an emerging market -- for example, a new
development whose sales could take off once some
properties are sold
· a seller's market with high demand and high
competition
SELLER
Do these characteristics describe the seller?
· needs immediate cash
· going through a partnership or marriage
break-up
· is moving out of state
· wants to liquidate an estate
· is retiring
· is an auction-minded seller
· has a listing that is about to expire
· has already purchased another house
· knows auction will bring a fair market price
· has financial problems
· has high carrying costs on the property
PROPERTY
Do these characteristics describe the property?
· carries a lot of equity (25% or more)
· unique -- enough market interest to encourage
competition
· burdening the owner with high carrying costs
· vacant -- vacant properties may encourage
vandalism
· difficult to appraise -- unique properties are
difficult to appraise
SUCCESS FACTORS
What Factors Impact the Success of a Real Estate
Auction?
Auctions Are Often Thought of as "Fire Sales" For
Properties in Distress. Is this True?
Until recently, real estate auctions, unlike art and
antique auctions, have experienced unfounded negative
images in the marketplace. The majority of auctions
today don't result from foreclosure of distress
situations, but rather are the result of a seller
choosing a cost-effective, accelerate method to sell a
property. Builders or financial institutions, for
example, prefer auction rather than laboring for months
or years to sell units of a development one by one.
Auction allows the seller to eliminate virtually all
long-term carrying costs, passing the savings directly
to the purchaser in the form of a reduced price. Auction
is truly a win-win situation: sellers obtain immediate
cash and buyers purchase properties at fair market
value, the price determined by open, competitive
bidding.
What Factors Impact the Success of an Auction?
A. The seller must have realistic expectations,
including a fair sales price, terms and timing.
B. Desirability of the property. This includes location,
conditions, plus the value of surrounding properties.
C. Carefully choose the auction type that best suits the
property and the seller's needs.
D. A well planned and aggressive marketing/advertising
campaign is critical to an auction's success.
E. Use a Certified Real Estate Auction Company to ensure
that the auction is conducted in a professional manner
and followed-up through the closing.
F. Making sure that due diligence information is
provided to prospective buyers AHEAD OF TIME.
G. Preparing the property for sale so it is presented to
prospects in its best condition.
(i.e.., title insurance, clean-up, financing,
etc...)