Auctions are a really awesome way to sell anything. It is all about marketing. With a regular home sale there is absolutely no urgency. We market and hope. With an auction, buyers know that if they do not show up on auction day they will not have a chance to own the specific property. Imagine putting buyers in a room face to face and let them fight it out for the home of their dreams.
First there has to be a need, sometimes properties have just not been marketed at al, The property has been on the market a while, the seller wants out, it is a difficult property or there is a lot of competition in the market place and we want to move the property to the front of the line. How do we do this? We spend approximately 1% of the last asking price on marketing. We send 30 to 60 thousand emails. We place full page print ads, signs, thousands of flyers sent to purchased mailing lists and we send them to all the local Real Estate offices. If the property is big enough, we use ads in the Wall Street Journal etc, etc, etc. We put it on the web site with information including an inspection report, maps, floor plains, purchase agreement, SPUDs, terms and conditions of the auction. We provide all the info that is available for the buyer to do their due diligence. We hold the property open for buyer inspection. Then we have an event on AUCTION DAY………music, food, we create a buzz. We usually auction something for charity to warm up the crowd. Then we auction the property. When we get the price as high that we can, we sell it, only if it is over the acceptable sellers price, if it does not reach that price we have the seller on site and ask them if they will accept the price. Sometimes there is further negotiations to get the deal done. We sign contracts and close with in 30 days with no contingencies. We create URGENCY!
NO COMMISSIONS ARE PAID BY THE SELLER
We add a 10% buyers premium to the high bid price and this is how we arrive at the total contract price. Out of that 10 % I pay a buyers broker, if one is involved, 3%. If you are the listing agent you get 3%. I pay back the Marketing Money to the seller and the rest is the auctioneers. If the property does not sell we can usually sell it post auction to one of the participants.The challenge to the seller at that point is if we had a great turn out and multiple bidders we probably got pretty close to market value. If the seller does not sell and the market was represented…then what? We do auctions and marketing. Not Miracles. Just like regular REALTORS.
We make it happen faster with more money for the seller.
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