What are the advantages to a seller in an auction situation?
Here are the TOP 10 reasons for having The Auctionator/Builder Clearinghouse sell your property for you at auction:
- Reduce Inventory Quickly
- Reduce Debt Loan
- Free-up Working Capital
- Increase Cash Flow
- Easily determine your bottom-line
- Pay no commission
- Shared advertising budget allows for greater exposure at reduced cost
- Creates additional public awareness of your product
- No contingencies for financing
- Average closing: 30 days from contract
Buyers come prepared to buy. "Lookers" are eliminated because our bidders must qualify through a deposit of a certified or cashier's check. An auction brings interested buyers to a point of decision. Buyers feel that if all the properties are sold before the auction ends it represents their last chance to purchase a desired property. Sellers get maximum exposure for their properties. The auction marketing strategy differs from conventional advertising. It is more concentrated, therefore more intense and visible. High carrying costs are avoided. Through auctions, the seller is in control and knows that if properly priced, his property will sell on a certain date, which is usually within 30-60 days of signing the sales contract. By selling quickly, the seller is able to avoid high carrying costs such as insurance, real estate taxes, security and maintenance and is also able to benefit from the use of the monies to reinvest in other real estate or investment opportunities elsewhere.
Other benefits are:
- Creates competition among buyers - auction price can exceed the price of a negotiated sale. An auction generates excitement and heightens buyer interest.
- Accelerates sales - the property can sometimes be sold within six weeks of listing.
- Auction is a true market forum - the highest buyer pays the lowest price a seller will accept.
- A seller sets the terms and conditions of the sale, maintains control of the property throughout the auction (depending on auction type), and actively participates in the sale process.
- Auction reduces the time the property is on the market.
- Auction eliminates numerous and unscheduled showings.
- Auction eliminates the negotiation processes that can often kill a deal.
- Auction is an aggressive marketing program that increases potential interest in and awareness of a property.
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How can I be sure that I am getting a fair price?
The only genuine measure of value of real estate is what someone else is willing to pay for it. An appraisal is merely an informed opinion. It is not an offer to buy. The real measure of value of real estate, at any given time, is what it will bring under competitive bidding from informed and motivated buyers.
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I have property to sell, what expenses am I responsible for?
Advertising is the only cost to our sellers. When a seller signs our service contract there is a pre-determined advertising fee. The amount of the fee depends on the size of the property and the size of the necessary advertising campaign.
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What are the benefits of selling your property at auction?
The real estate auction is definitely a win-win proposition for everyone involved. The seller disposes of properties quickly and efficiently, thereby saving long-term carrying costs such as interest, real estate taxes and maintenance. For the buyer this can mean a smart investment, since properties are usually purchased at fair market value through competitive bidding. Because the auction sale is conducted in an open forum, both motivated buyers and motivated sellers have the assurance of watching the property's true market value emerge as the bidding process progresses. For both buyer and seller, fair market values for the property prevail.
An auction creates competition among buyers and exposes the property to a large number of pre-qualified prospects. Because it is an accelerated sale, property can often be sold within 6 weeks of listing.
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What factors determine the success of an auction?
- The desirability of the property being sold. This includes location, condition and surrounding properties.
- An aggressive marketing and advertising plan geared to prospective purchasers.
- Realistic expectations on the part of the seller.
- Selecting the type of auction that best suits the property and the seller's needs (absolute or minimum reserve pricing).
- Conducting the auction in a professional manner and following up through closing.
- Undertaking due diligence ahead of time so buyers are knowledgeable and the only issue that remains is price.
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Are all properties suitable for auction?
Most properties, but certainly not all, are saleable by auction. Residential property (including town homes, condominiums, cooperative apartments and single-family homes), commercial property, vacant land, development parcels, etc. are sold at auction. Some sellers try to sell unsuitable or unmarketable property through an auction. This is property that perhaps has been on the market too long, causing prospective buyers to consider it "tainted." Perhaps the project itself was poorly constructed or planned. These types of properties don't do well at an auction and most reputable auction marketing companies would not accept them.
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If a property doesn't sell auction day is it still possible to market it?
Yes. The auction marketing method has exposed the property to a large segment of the buying public. Many times a buyer who wants the property but is uncomfortable with the auction process will make an offer after the auction date. In other instances offers to buy the property prior to the auction date are made and accepted. The Auctionator/Builder Clearinghouse handles all aspects of these offers/sales.
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Don't real estate auctions depress home values?
Not at all. Real estate auctions reveal the true market value of a property because auctions are conducted in an open forum where all bids are known, and participants are given immediate feedback on the property's value. At auction, values settle at the level the market can bear, neither elevated nor deflated.
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Who usually buys at real estate auctions?
Anyone can benefit from buying at a real estate auction. Many people who buy are first-time homebuyers who may otherwise be shut our of the real estate market. For them, the auction is a realization of a dream. Empty nesters and investors also comprise a large segment of the auction buying public.
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How are properties usually advertised for auction?
This varies greatly depending on the type and value of the property being sold. One of the essential underpinnings for a successful auction is a highly aggressive marketing program. Each auction has its own powerful promotion and advertising. Auction marketing is an intensive effort and a well-timed plan to create massive interest in the properties available for sale. The advertising budget is established according to specific properties and the type of market that's needed to be reached. That budget is then broken down into various forms of advertising that will best target the market for the auction. The various forms of advertising are: sale bills or brochures mailed directly to prospective purchasers and posted in public places, newspaper advertising in local and possibly regional or national papers, ads in trade journals and magazines, internet, radio ads, signs posted on the property and possibly television and cable ads.
The Auctionator/Builder Clearinghouse is an experienced real estate brokerage and marketing company that knows which forms of advertising are best for a particular type of auction and its location and will facilitate everything from preparing the advertisements to placing them in the desired forms. The aggressive advertising hits large groups of buyers that will come and competitively bid on property thereby yielding true fair market value for a seller's property(s).
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How long to I have to close on the property?
The time frame varies depending upon the type of property auctioned. Generally, our contracts stipulate a 30 day settlement from auction day to closing. New construction and development parcels may require longer to close and should be determined at the time of the listing agreement.
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What if my property is already listed with a licensed Real Estate Broker?
The Auctionator/Builder Clearinghouse DOES NOT intentionally solicit the active listings of other brokers. However, should you wish to pursue our auction services, we will work hand-in-hand with your existing listing broker to facilitate an auction for your property. We do not require you cancel your existing listing agreement and we do not take any portion of your listing broker’s commission.
