NOTE: I would like to to thank my colleague Ms. Kimberly Kyle with United Real Estate Richmond (Visit her Bio Here) for contributing this blog post! We are working on a project with her clients, and this blog is a result of the realization that we need a guide to explain the auction process to potential sellers.
Are you working with an agent? We often work with traditional REALTORS, and best of all, your agent's commissions are PROTECTED!
Q: What's better than having a professional on your side? A: TWO Professionals! Read On!
What is the Auction Method?
The Auction Method is a way to sell real estate through an auction process. The auction process allows interested buyers to place bids on the property which continues until there are no more bids offered. In this case, the buyer who offers the highest bid gains the ability to finalize the sale and take ownership of the property.
The steps to prepare for an auction are relatively simple. The seller makes the decision to sell the property through an auction and works with a real estate agent and auctioneer to begin the process. Once the property is prepared for the auction, a starting bid price is set, an open house is scheduled, and a date is set for the actual auction where bids are accepted from interested sellers.
The following are some reasons to consider using the Auction Method:
1. Auctions attract more buyers
o An auction showcases your property to a larger, targeted online marketplace, providing maximum visibility.
o The Auction Method uses the Multiple Listing Service (MLS), plus markets the property on local and national/international online auction sites.
2. Auctions are fast and efficient
o Traditional selling processes depends on buyers to show interest, to view your property, and to make an offer.
o We control the home showing process using an Open House auction style which eliminates the hassle of showings.
§ If showings are permitted by REALTORS, we use a professional service to schedule them.
§ We do Virtual Tours for those that are out of the area.
3. Auctions Bring True Market value
o At an auction, the fair market value of a property is established by the bidders and increases from there with competitive bidding.
o Competitive Bidding is a key ingredient of an auction’s success.
4. Auctions are transparent with bidding
o At an auction, the seller and buyer (bidder) both know where the price is.
o The stress of price negotiation and multiple offers is eliminated by auctioning.
5. Auction price is not final
o The property is sold with a “Reserve Price” that sets the minimum acceptable selling price.
o If the Reserve Price is not met, the seller is not obligated to accept a lower price for the property.
6. Auctions do not have “Buyer Conditions”
o At an auction, all terms and conditions are determined in advance by the Seller.
o Auctioned properties are sold, “as-is”, without the risk of traditional sales falling through, due to inspections, financing, or other contingencies.
7. Auctioneers only represent the SELLER
o Auctioneering laws do not permit Dual Agency (the Broker represents the buyer and seller).
o There is no potential for a conflict of interest.
8. Auctions do not charge commission to the Seller
o With an auction there are no commissions for the Seller to pay as the buyer is charged a “Buyer’s Premium.” over and above the final sale price of the property.
o Seller may be responsible for other cost associated with the auction, such as additional auction services that are contracted for.
9. Auctions allow the Seller to sell other personal property
o This is especially helpful when the Seller needs to downsize, as may be the case in an estate
o Other personal property such as vehicles, boats, tools, almost anything can be listed for auction online along with the home.
10. Auctions allow the Seller to continue to work with their trusted real estate agent
o This is especially helpful when the Seller needs to rely on a trusted and knowledgeable resource.
o Eliminates conflicts of interest and unnecessary confusion during the process.
Can’t make it to our auction?
Download our mobile bidding app to your smartphone, and bid from wherever you need to be. Works for both Apple and Android.
