CAN AN AUCTION HELP SELL YOUR PROPERTY?
In many situations, an auction can accelerate the sale of your property by utilizing a time definite sale date with an aggressive accelerated marketing campaign. An Auction Consultant can help you determine if an auction will benefit you?
WOULD AN AUCTION HELP SELL MY PROPERTY QUICKLY?
A typical auction campaign runs 90 days or less and closes within 30-45 days. Auctions are often referred to as accelerated marketing programs. One of the main benefits of an auction program is the reduced holding costs of a quick sale. A quick sale and closing also requires a quick move out by the seller. Be prepared for moving day by utilizing one of the internets free moving estimate services.
CAN I AUCTION MY PROPERTY IF IT IS LISTED WITH A BROKER?
Yes, talk to your broker about utilizing an auction to sell your property. A motivated
broker can be very helpful with the auction campaign. Remember, your Broker doesn't earn a commission until he sells your property. If your listing is nearing its end, your Broker should be exploring methods to accelerate the sale and earn that commission.
WHAT ARE THE TERMS IN A TYPICAL AUCTION CONTRACT?
The property is usually sold as-is, where-is, with all faults and NO contingencies in the contract. The closing date is typically within 30 days after the auction with 10% required as a deposit on auction day.
HOW DOES A BUYER VIEW AND/OR INSPECT THE PROPERTY?
As part of our tried and tested marketing scheme we hold multiple "Open Houses" leading up to auction date. A prospective buyer should have ample opportunity to view and/or inspect the property prior to auction.You can obtain all reports and perform all inspections before you ever make your first bid. With negotiated sales, you usually don’t receive reports or have the opportunity to inspect the home until after the seller accepts your offer. One of the great advantages of our auctions is that you receive all reports and perform all inspections before the auction. So you only bid on a property that meets your approval in advance
SHOULD I FIX-UP MY PROPERTY PRIOR TO LISTING IT FOR AUCTION?
When selling any real estate, improving the eye-appeal and condition of your property prior to the auction can be to your advantage, depending on costs. Remember, if your are selling your property "As-Is", you will still be providing sellers disclosures of the property condition.
WHY HIRE PROFFESIONAL AUCTIONEERS?
Real Estate Auction Proffessionals can assist you with the procedures necessary for conducting a successful auction, i.e., evaluating your property within the market, setting the reserve (if applicable), design and distribution of property brochures, web-site design and promotion, mail-outs to targeted buyers, print advertising in newspapers, trade magazines and public relations. The value of your property will determine the auction method and applicable promotions for the sale of your property. All this for a very reasonable cost.
HOW CAN I DETERMINE THE VALUE OF MY PROPERTY?
A broker or appraiser can best determine the realistic value of a property. Instant Home Valuations!
ARE AUCTIONS COMPATABLE WITH 1031 EXCHANGES?
Yes!! Auctions are compatible with 1031 exchanges. Call your tax advisor for details. We will be glad to discuss the auction process with them relative to regular and reverse 1031 exchanges.
WHAT PRICE CAN I EXPECT FOR MY PROPERTY?
Market value, and sometimes even more, can be obtained using the auction methodology and dynamics. According to the National Association of Auctioneers, real estate auctions historically bring market value, plus or minus 15%. Your individual property may bring more, or less, than those historical norms.
WHAT TYPE OF AUCTION CAN I CHOOSE FROM?
During our consultation we will explain the difference between (i) auctions “with reserve” and (ii) “absolute” auctions. Essentially, auctions ‘with reserve’ have an unpublished minimum bid requirement that bidders must meet before the property can be deemed sold. Other auctions are “absolute,” selling to the highest bidder, regardless of price. We will explain both types so that you can choose the type of auction that best suits your needs.
HOW LONG DOES IT TAKE TO MARKET MY PROPERTY?
Typically it takes about 4-8 weeks from the day you say “go.” Best of all, you can pick the date and time when your property can be sold at auction. In the weeks before the auction an intensive, focused, marketing campaign is planned and executed, focusing exclusively on your property and targeting likely prospective buyers for your property. Newspaper ads, direct mail, email blasts, flyers, web marketing, and even TV and radio may be used, all featuring your home exclusively. A set number of open houses are held, and we attend each one where we answer all questions from prospective bidders and showcase your property. All this leads up to auction day, when the actual auction is held, usually at the property, and usually on a Saturday, should that be your choice.
What happens on auction day?
Our staff handles all aspects of the auction. You will be surprised at the fun and exciting atmosphere of the entire event. We register all bidders, issue bidder paddles, and explain in advance how an auction works. Often, we will hold a sample auction, just for fun, perhaps auction a bottle of wine, to show first time bidders how the method works. Once competitive bidding begins, it moves quickly, seldom lasting more than a few minutes before the bidding ends. Auctions are quick, efficient, exciting and fun.
DO BIDDERS PAY CASH?
They can, and often do pay cash. However, many bidders elect to use financing from banks and/or private lenders. Bidders are requested to provide proof of available funds and/or be pre-approved by a lender in advance, unless you, the owner, waive such requirement for any individual bidder. Bidders are provided the opportunity to perform all inspections and review all reports prior to auction day, so when they come to bid, they have already decided that they are interested in your property and that they are willing to purchase it unconditionally, AS IS, WITH ALL FAULTS, subject only to your ability to convey legal title in the manner represented in the marketing materials.
WHAT ABOUT CONTINGENCIES?
One feature that sellers appreciate the most is that real estate auctions are contingency free. That means that buyers agree in advance to accept the property “AS IS” and “WITH ALL FAULTS.” This is possible because bidders are provided with the opportunity to conduct all necessary inspections and “due diligence” investigations, and to obtain available reports before the auction. So, they can bid with confidence, knowing in advance that they have already inspected the property, and that they are interested in bidding. No more haggling over price and terms; no loose ends.
WHEN DOES ESCROW OPEN & CLOSE?
We have escrow officers at the auction. Immediately following a successful auction, the winning bidder is escorted to the escrow table and escrow is opened at that time. Auction escrows are often set to close in 35 days or less, unless you choose otherwise.
WHAT COMMISIOINS DO I PAY?
None. That’s right, none. One reason sellers so often choose to sell using a real estate auction is because the seller pays NO COMMISSION.
HOW IS THIS POSSIBLE?
Auctions use a “buyers premium” usually 10%, which is added to the final winning bid; the total purchase price them becomes the sum of the final winning bid plus the buyer’s premium. All commissions are paid from the buyer premium, so the seller pays no commission. The usual buyer premium is 10%.So, For example, if the final winning bid on your property is $100,000, then you would receive funds when escrow closes in the amount of $100,000. The full amount of the high bid goes to you, all of it. At the auction, the high bidder knows in advance, that they will pay a 10% “buyer’s premium” in addition to the final winning bid amount. In the example given above, the 10% buyer’s premium would be $10,000 (10% of $100,000 equals $10,000). From the buyer’s premium all commissions will be paid. When escrow closes, using the foregoing example, the full $100,000 goes to the seller, and the additional buyer’s premium of $10,000 pays all commissions. Clean, simple, and no commissions from the seller. In this example the final sales price would be listed as $110,000.
