Creates
competition among buyers ‑‑ auction price can exceed the price of a
negotiated sale. An auction generates excitement and heightens buyer interest.
Exposes the property to a large number of pre‑qualified
prospects
Requires that potential buyers pre‑qualify for
loans
Accelerates sales ‑ the property can
sometimes be sold within six weeks of listing
Eliminates high seller carrying costs ‑‑
(such as interest, taxes, maintenance)
Auction
brings interested buyers to a point of decision ‑‑ they must act
now or lose an opportunity to purchase
Auction
is a true market forum ‑‑ the highest buyer pays the lowest price a
seller will accept
A seller knows exactly when the property will
sell
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 takes the seller out of the
negotiation process
Auction
is an aggressive, advance marketing program that increases potential interest
in and awareness of a property
Seller is able to obtain liquidity
Seller is able to move on to other investments and
free up capital
AUCTION ADVANTAGES
Agent Benefits
Provides a list of ready and qualified buyers
Increases profits
Offer clients and customers new selling and
purchasing options
Increase
market share and revenues ‑‑ new business opportunities are added
Enhance company's image
Develop
your own market niche ‑‑ able to offer new products and services
other agents aren't providing
Exposes the property to many potential
purchasers
Auctions
appeal to people ‑‑ it brings them in to look at all the listings
you hold, not just the auction listing
Auctions cause referral and return business
Able to build rapport with auction firms
Learn new business techniques and skills
Agents don't have to be auctioneers to earn
commissions ‑‑
* earn referral fees as referring agent/broker *
work as cooperating agent/broker * work as listing agent/broker
"A GUIDE TO REAL ESTATE AUCTIONS11
Introduction
Real Estate Auctions have
gained credibility and popularity among the general public over the past few
years. The NATIONAL ASSOCIATION OF REALTORS40 believes real estate auctions are
an innovative marketing tool which can benefit buyers and sellers in good times
and bad and, under the right circumstances, they are a viable alternative to
conventional marketing programs. Auctions can accelerate a property sale and
maximize a property's selling price. Auctions are another means in which to
bring buyers and sellers together.
Why Auction? There are many
reasons why the auction method of marketing should be considered. Here are a
few:
Auctions
produce a quick sale. High carrying costs can be avoided. Value can be
demonstrated and market prices can be found. The auction method draws attention
to the property. A sense of urgency to buy a property is created.
As
a broker, you can get involved in auctioning property in several ways:
0Referring
prospective sellers and getting a fee.
Registering prospective buyers for an auction and earning a
commission.
Joint‑venture with an auction company.
Start an auction division within your firm.
The following is a
compilation of questions and answers prepared to assist you in more fully
understanding the real estate auction process. This document is not all‑encompassing.
Should you have further questions relating to real estate auctions, please
forward them to the NAR Auction Department and an answer will be provided.
Contact: NATIONAL ASSOCIATION OF REALTORSO, Real Estate Auction Department, 430
N. Michigan Avenue, Chicago, IL, 60611‑4087. Comments may be faxed to
312/‑329‑8338.
I
"A GUIDE TO REAL ESTATE
AUCTIONS11
1. WIM T IS A ‑REAL
ES TA TE A UCTION?
A Real Estate Auction is a method of buying and
selling reaj estate. It is an intense and accelerated real estate marketing
process that involves the public sale of
property through open, competitive bidding.
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. For the
agent, auctions can mean an increased client and customer base as well as
increased profits.
