Change is the only constant in life. Remember when everyone still had a land line, when going online required using a desktop or when reading a book meant holding a book in your hands? Those accepted realities have been consigned to ancient history in a span of ten years. They are old news. Auctioneers are dealing with a similar phenomenon when it comes to selling real estate.
Going back over the years, if I had a dollar for every time someone made the following statements to me:
1) I don’t want to give my property away
2) I thought auctions were only for farms
3) I thought auctions were only for foreclosures
4) I thought auctions were only for distressed properties
5) I thought everything sells cheap at an auction;
my retirement fund would be quite a bit larger. Times have changed for real estate at auction and if you’re still laboring under outdated misconceptions, you’re limiting your options when it comes to selling your real estate
Listed below are ten points that offer insight into why real estate is the fastest growing segment of the auction industry.
1) Auctioneers don’t make a living or build a sustainable business by giving things away. Auctioneers thrive by finding fair market value. In the overwhelming majority of cases, we work on commission. The more our client makes, the more we make. There is no incentive from a business perspective in “giving things away”
2) If everything goes cheap at an auction, why are many of the best antiques, the best paintings, the best jewelry, the best livestock, the best cars and the best real estate offerings sold at auction? The simple answer is professional marketing and competitive bidding establish fair market value
3) What is your time worth? If you want to sell real estate, are you willing to sacrifice an inordinate amount of time to do so? What if more time actually results in less money? Does that make good sense? A real estate auction ensures that your property sells for its actual value on the open market in a time defined, accelerated manner.
4) Time defined, accelerated marketing reduces holding and opportunity costs.
5) Auction terms and conditions can state that expenses normally charged to the seller, such as commission, realty transfer fees, deed preparation and utility certifications, will be paid by the buyer.
6) Auctions produce determined, committed buyers. The significant deposit required upon acceptance of the high bid is non-refundable. Tire kickers don’t last very long in the real estate at auction world. When the contract is signed, it’s sold. No post contract inspections, concessions, retractions or vacillations are permitted.
7) Property sells in its current condition at auction. That condition may range from exceptional to poor. In most cases, inspections prior to the auction are welcome; however, once the hammer falls, it’s a done deal.
8) Real estate at auction demands that every interested party participate in the same venue, at the same time with the same rules and that the entity placing the highest value on the property wins. That is fair market value determined through competition as opposed to who gets there first. Do you really want to discover ten days after you signed a contract that another buyer was willing to pay more or demand less; but, their agent happened to be on vacation when your property was trending?
9) When a property goes under contract in three days via a traditional realty process, should it occur to the owner that money may have been left on the table? How was the asking price arrived at? Competitive bidding, not Comparative Market Analysis, determines fair market value. Price your property too low and you lose.
10) If a property remains on the market for months or even a year or more, does that increase the likelihood of completing a successful transaction that meets expectations? Competitive bidding, not Comparative Market Analysis, determines fair market value. Price your property to high and you lose.
Surprised at the logic? Professional real estate auctioneers know that if you provide accurate property descriptions, proactive marketing, property inspections and competitive bidding, you’ll establish fair market value. We don’t guess at the price and we are not obliged to defend our estimate. Real estate at auction places the responsibility of determining value on the buying public. Competitive bidding establishes fair market value. Auctions don’t over price or under price real estate. They reveal its true value on the open market.
It’s time to move forward. Real estate at auction is the rising star in the world of property transfer. Are you still attached to your land line? Well, that may work for telecommunications; but, if you want to keep step with the latest in real estate marketing you should contact a real estate auction professional. The future is now.