How The Auction Method Of Marketing Eliminates Problems For Sellers
Instead of carrying a piece of property for six months to a year or longer, an auction can effectively be scheduled
within 30 of approval of an auction listing agreement.
The auction method of marketing accelerates the selling process for their property, forcing purchasers to deal with a deadline
by establishing a specific date, time and place for the auction sale. This creates a sense of urgency and forces interested
parties and possible buyers to finalize arrangements for attending open houses and/or private showings, pre-arranging for
financing commitments, consultation between spouses and/or business partners, legal representation, etc. in advance so as
to be fully prepared to make their highest and best bid on the day of the auction.
The Three Types of Real Estate Auctions
There are three types of auctions sales that can be considered when selling Real Estate. These are:
- The Reserve Auction
- The Unreserved Auction
- The Absolute with a Minimum Bid Auction
The Reserve Auction allows the seller to reject the highest bid for any reason. Reserve auctions protect the seller,
but tend to attract the fewest buyers.
The Unreserved Auction method of marketing exposes the property to the greatest number of buyers in the shortest
period of time. The property sells to the highest bidder, regardless of the final bid. While the unreserved auction is obviously
the riskiest, it also attracts the most buyers and often generates a higher than expected selling price.
The new Absolute with a Minimum Bid Auction allows the seller to set the lowest amount that is acceptable for selling
the property. All promotional materials and advertising for the property will include this figure so that only potential buyers
that can afford the property will register to bid at the auction. With this type of auction, the seller can rest easy, knowing
that the property will not be sold for less than the mortgage balance, etc.
Not all properties are good candidates for this type of auction. If the minimum bid does not reflect a "bargain" - 20%
to 25% below the current market in the area, for example - then there is no motivation for potential buyers to attend. A minimum
that reflects a bargain price will attract buyers, and allow the auctioneer to "work his magic" to drive the bids up!
Specifics Regarding The Unreserved Auction Method Of Marketing
To ensure aggressive bidding and to maximize results of the auction, John L. Subik brokers, auctioneers
County Line Auction and agents emphasize educating bidders on unique features and desirable characteristics of the property.
A high confidence level by the bidders is commensurate with spirited bidding and successful real estate auctions.
The auction is open to all interested parties, and is widely advertised so as to avoid any criticism or lack of information,
opportunity or cooperation by any third party to be able to buy any asset.
- In an unreserved auction, the auctioneer will accept the highest bid, regardless of the amount. The seller does not have
the right to accept or reject that bid.
- In an absolute auction, the property MUST sell. The seller may not bid on the property to buy it back.
- The Seller, in advance, establishes a minimum (reserve) bid, which may or may not be know to the bidders.
- Non-Contingent Purchase Contract:
- A contract for the purchase and sale of the real property that contains no contingencies (ie: financing, radon testing,
- Buyers Premium:
- A buyer's premium is a commission, usually a percentage, that is added to the last bid and is paid by the buyer.
Getting The Word Out
County Line Auction mails auction flyers to buyers across the state and the nation featuring at least one photograph and
details of the property including address, acreage, assessment, taxes, terms, dates and times of auction and open houses,
plus other pertinent information.
Extensive advertising in local, regional and national newspapers, as well as business.