You know that buyers come prepared to buy! Other seller benefits include quick disposal, reducing long-term carrying costs, assurance of sale at true market value, accelerating the sale, creating competition among buyers, eliminating numerous and unscheduled showings and especially knowing that there is an aggressive marketing program that increases interest and visibility.
If I sell at auction, aren’t I giving it away?
Many people believe auction means bargain. Auctioneers understand this psychology and use it to draw large crowds of people which helps to ensure that the price is good for the seller. While there are indeed many good buying opportunities at an auction, the best articles in the world are sold at auction when pricing becomes difficult. The reason why people with very expensive items, and very modest items choose auction, is control. Through auction, the seller controls the time and terms of the sale, and virtually guarantees a marketplace by creating one if necessary. In strong real estate markets around the country you may have seen properties “listed for one price” and “sold above listing price”. What happens in these situations is an auction, except that rather than being opened by announcements as such to the entire marketplace, they are usually conducted between the two or three buyers that have found the listing at that time, and they make offers not knowing what the other offers are and how much they have to give to beat the others. In these cases, we think of them as listings, but really a limited auction is taking place, and it is acceptable to the seller or they would not be selling.
Why would I sell my Real Estate at auction?
Maybe you shouldn’t. Have a look at the cases below, If you are a seller contented with where you live, and are considering moving up if you can get the right price, you will find the real estate agent traditional listing a better vehicle to service your needs at that time. However, if you are liquidating or control a vacant property, you are not the same seller, and then the auction solution will suit you better.
What is the advantage of a combined Real Estate/ Inventory & FF&E Auction?
The biggest advantage lies in the ability to market and advertise both events simultaneously, eliminating the double expense of separate efforts. The secondary and most overlooked advantage lies in the double market penetration aspects of the advertising campaign. Many times we hear bidders explain how they were only looking for real estate, but ended up buying items from the inventory & FF&E auction that they didn’t even know they were looking for. This rule runs both ways as more often than not people that show up for the inventory & FF&E auction ultimately end up bidding on the real estate as well.
What advantages does an auction have?
The advantages are different for different sellers, but generally think of it this way. There are 3 elements of a real estate sale. The price you get, the time it takes to sell it, and the terms of the sale. In a traditional listing you don’t control any of these. You can’t predict how long it will take to sell, nor what conditions will be in the offer. You feel like you control price, but you really only control the right to say no and then keep the property. The buyer always decides the price. You merely accept or reject it. In an auction, you control both the time and terms because you set them. And the price is controlled to the same extent seen in the traditional listing with the seller’s ability to say no and refuse to sell. The difference with auction is that you are going to employ an aggressive marketing campaign to generate a high degree of interest and use the competition and the professional skills of the master auctioneer to drive the offer to its highest level. So the advantage of the auction is control.
Can I get a good price at auction?
The truth is that whether you offer your property at auction or by traditional real estate listing, the buyer is the one who is spending the money and therefore controls the price. In both cases you have the right to refuse any offer, but you can’t spend the buyer’s money for them. Our experience is that sometimes an auction leaves you feeling that you got more, and some times a listing leaves you feeling that way. The decision to auction or not to auction should depend on criteria other than getting the most money.
What is more important than getting the most money?
Getting the most money is important, to you and to us. But you can’t sell a property through a traditional listing and the auction process at the same time, so you should look at other information to help drive the choice. Information such as “Is the property currently being gainfully used by you at this time?” If it is, you may want to get a certain price or otherwise remain in the property. If not, then every day the property remains unsold is a net cost against your bottom line. Costs such as heat, hydro, taxes, insurance, maintenance, security, depreciation, and loss of return on the money invested otherwise are ongoing and mean that the longer it takes to sell, the less you ultimately put in your pocket. Another reason that you may choose auction is that you are selling the property for an estate or a friend, and you do not live close to where the property is. You are concerned about having the property on the market for an indefinite period of time while it sits vacant. An auction will give you firm control of the time line here and ensure you are able to sell it and move on. In these situations the risk of listing the property is higher than the risk of auction because you give up more in a listing.
Do I have any protection from what I feel may be too low of a price?
At our auctions we offer to do business with or without reserve. If you wish to sell without, then you must accept the best offer generated. Most of our properties however are sold with the seller having the right to accept or reject any offer. That is your protection against an unacceptable price.
How often do properties sell for less than appraised value?
This is a difficult question to answer because it suggests that listed properties typically bring their appraised price which is not true. Appraisals, while helpful in making decisions are an imperfect science. They are predictions of what a property should bring based on the best available comparable sales in the marketplace. If there are an abundance of sales of very similar properties, then the appraisal is probably an excellent prediction of price. If there are few sales of similar properties, then the appraisal may be very high or very low compared to actual sale price. This holds true in both traditionally listed properties, and for auction properties. We have sold properties for substantially more than appraisal, and for substantially less. In all cases, the seller agreed to the price, and the appraisals were in error by the amount they differed from the actual sale price.
What about Inventory Items & FF&E…do they sell well at auction?
Inventory & FF&E are best sold in tandem with the Real Estate at auction in our experience. While we do auction them separately when a customer requests it, the dual auction in most cases will best achieve the goals of the Seller. Real Estate/ Inventory & FF&E Auctions are also typically attended by more people than a non- Inventory & FF&E property. Competition is often greater, and prices better.
What kind of options are available to me through auction?
Real Estate auction holds many choices. These include selling live on site, live in a ballroom or office location, by fax, online, by mail, or by a combination of these methods. Auctions can take place with reserve, or without reserve. Most auction processes require the seller to pay for the cost of marketing the product while the buyer is responsible for the commission. Most real estate auctions can take place within 60 days of contact with our firm, with closing following typically in 30 days. Some properties can be sold faster, and some large properties may require a longer marketing period. We specialize in gaining a clear understanding of the customer’s needs, and then making a plan that best utilizes available technologies to best meet your goals.
What services do you supply?
We supply all one would expect in the auction business such as auctions of real estate and business & personal property. In addition we also appraise business assets & personal property, and arrange for real property appraisal if it is desired.
Aren’t all auctioneers the same?
Doctors are not the same. Lawyers are not the same. Real Estate agents are not the same, and auctioneers are not the same. Auctioneers offer a variety of services from specialties to very general auction services. Some are high service providers, and some are lower. Some have professional training, and some do not. When hiring an auctioneer, ask if they have experience in the field you require. If you call us, and we can’t service your needs, we probably know someone who can- anywhere in North America! We know how a traditional sale works.
Offer your clients new selling and purchasing options, increase revenue and market share, expose the property to many potential buyers (property is usually sold in six weeks), bring people in to look at all the listings, not just the auction listings and agents can earn commissions as referring, cooperating, or listing agent/broker.
Do you have other questions about selling assets at auction? Contact us today.