It is amazing to me that some out there have a strange understanding of what "True Market Value" is and how to go about finding it in this type of market.  Over the past several years that was a phrase that was rarely used in real estate, I think mainly because sellers felt they controlled the "market value".  As we know (and if you didn't you're finding out now) buyers actually control value.  I had a discussion with a "RE Pro" a while back, she was under the impression that she could dictate what someone was going to buy her listing for.  Well, in those good times it sure seemed like it, but true market value (what someone is willing to pay for any item at any given time) is a product of the buyers willingness to pay.  I told her if that were true why not list that $450,000 for $800,000 and see how long it takes and how many times you reduce the price until you find a willing buyer.  And that brings me to the current market and how the search for "True Market Value' is achieved.  The options for this achievement are slow and fast.  We all know what the slow method is, list at what you think market value is(or what your seller tells you they want) and keep reducing until you get there.  Or, you use aggressive marketing to attract perspective buyers to a designated place at a designated time start the bidding and increase until you achieve "True Market Value".  Either way you are going to get to that magic number and both methods are viable, the key is you must know what your clients goals are and select the method that will best serve their needs.  And if that method is the auction, make sure you contact a real estate auction professional who knows how to work with, not against "list and sell' agents.  I know most of you know this, and you're wondering why I even write about this, but it seems interesting when I ask a prospective client what they think their property is worth and they answer "well the house down the street is on the market for $???,???, you have to wonder if the past years of a "great market" has caused us to forget what "True Market Value" truly is.    

Pacific Auction Exchange introduces epax online auctions.  Starting Sept. 1st we will begin this very exciting service that will allow any property to stand out among 1000's of other properties listed for sale.  Some of the benefits of an online auction are:

    They attract bidders who are ready and prepared to buy

    epax Online Auctions reduce long-term carrying costs, including interest, taxes, insurance and maintenance

    Online Auctions expose properties to exponentially larger number of pre-qualified prospects

    Online Auctions create competition among buyers-auction price can often exceed the price of a negotiated sale

    Online Auctions accelerate the sales process, and establish an exact date of sale

    Online Auctions remove the seller from the tedium of the negotiation process, seller concessions and     contingencies     

    Online Auctions eliminate numerous open houses and unscheduled showings

     Online Auctions ensure an aggressive marketing program that results in global interest and visibility

    epax Online Auctions have no long-term contracts

 

The cost of this service is only $1750 to the seller.  Just as the live auctions Pacific Auction Exchange specializes in, the seller does not pay a commission.  We also pay a very competitive referral percentage to referring brokers.  The property is posted on the web site for 30 days starting on the 1st of the month and running to the 30th of the month

ATTENTION REO BROKERS: Listing posted for the Sept. campaign are free. We are waiving the $1750 for REO listings

 

Please call soon for more information. 707-694-0229 

On the day before the auction I talked to my client about the auction days procedures,and his comment was "it's that time already".  It is amazing how fast time flies when there's a set date to end the drama called "SELLING PROPERTY".  It seems every time you blink it's time to prepare for another preview.  The previews were a snap because in the three hours there's a steady stream of potential bidders, curious neighbors, potential sellers and the list goes on.  The point is auction previews are unlike "open houses" attract a lot of attention.  How many open houses lately can boast about 20-30 people per preview showing up.  And this was a relatively light showing.  These numbers resulted in 8 bidders at the auction.  It took about 10 minutes to sell this beautiful home. 

 As I said before, the Bay Area now has a viable alternative to the "list and sell" tradition.

That's right on July 27th @1:07 PM this lovely Castro Valley, Ca home will be sold to the hightest bidder, REGARDLESS OF THE PRICE!!!

This charmer is a 3 bedroom 1 bath completely renovated (inside and out) approx. 1200 sq/ft home in one of the Bay Areas' best school districts.  Visit my web site www.propertybyauction.com for auction terms and property information.

 

 

Well, Pacific Auction Exchange (PAX) has done it again.  On March 30 the PAX franchise in Campbell CA (near San Jose) held a property auction that will go down as a pinnacle in the surging real estate auction industry.  This was a charming 3 bedroom 2 ½ bathroom home with a 2car garage in a very nice neighborhood.  The seller could have listed this property with a traditional "list and sell" brokerage, but there first choice was to auction the property and let the true market value prevail.  I own a PAX franchise in Vallejo (about 60 miles north of Campbell) and attended the auction to help out if I could and to lend support.  Well, when I pulled up to the property I realized this was going to be special event.  30 minutes before the auction time I would estimate around 100 people in and around the property.  When it was auction time that number had swollen to close to 300!! They had to put cones in the street so the traffic could pass.  Of those people at the property 49 brought $25,000 cashiers checks to register to bid. (I believe around 20 or so were pre registered with agent representation)  Needless to say this was going to be a great auction.  And that it was. I asked a friend of mine in the mortgage business in that area what he thought the property would bring, he said a year ago it would go for high 800,000's but now maybe high 700,00's.  After a submitted opening bid of $525,000 and around 5 minutes of bidding they winning bid was $860,000 bring the final contract price to $946,000.  By the way this was an Absolute Auction.

One of the most difficult things for Property sellers to realize is that the best way to sell a property is using an "Absolute Auction" , where the property will sell regardless of the price.  This method takes full advantage of power of the auction method of marketing property.  If there was a potential buyer who was thinking about buying a property and had the cash to do so, they are most likely to attend the auction. An auction is the "The firm and time defined sale of real property by competitive bid", and no other method holds true the that definition.  The next best would be the "minimum bid" auction that states a property will be "absolute after meeting an agreed upon minimum exceptable price.  Reserve Auctions, where the seller has the right to deny he high bid, will see very limited success because it does not hold true to the definition of an auction. 

PROPERTY OWNERS
Finally, an alternative to the "List and Sell" (or "List and Wait") has come to the SF Bay Area. The Auction Method of Marketing has proven itself as a viable way to sell all sorts of real estate. Real estate auctions have long been thought to be reserved for distressed properties or for those who are desperate, well that is far from the case. Thousands and thousands of properties are sold by auction every year, and in all types of markets. What makes them so attractive to more and more sellers comes from a multitude of reasons. This method uses a very aggressive marketing campaign to generate excitement and heighten buyer interest. A successful marketing campaign will bring a number of motivated potential (pre-qualified) buyers to competitively bid for a property. By creating the market through this method, highly motivated buyers are brought to the property; the challenge of waiting for buyers is therefore eliminated. The results from this competitive and exciting setting is the potential of reaching a selling price that exceeds the market price.A few benefits to this win-win opportunity are:1) The seller of the property pays no commission.2) The property is sold in as few as 30 days and closes with no contingencies in 30 days or less.3) The Seller plans the date and time they will sell their property.4) The Seller is not required to provide multiple showings of the property, which usually occurs at inconvenient times.Investors can also find the auction method as beneficial. If you know when your sales and closing dates are you can plan on more projects.

REAL ESTATE AGENTS AND BROKERS
Real Estate auction companies can also be a powerful tool for "List and Sell" companies as well. After aggressively marketing a property, there can be anywhere from 5 or more bidders competing on that one opportunity to own that one property. That property has been marketed and sold in around 30 days, so the broker can clear their listing faster, the seller can sell their property faster. As an added bonus, there are now 4 or more qualified buyers looking to buy property, so the broker has the potential to clear more properties from their list. The number of auction companies has been on the rise for several years now. Most are in the mid-west and east, but they are now making a strong drive in the west. One such company is Pacific Auction Exchange (PAX), which made its debut in 1999 and began real estate auction operations in January, 2001. PAX began franchise operations in November, 2001 . As the fastest growing real estate auction company on the west coast PAX is the only franchised real estate auction company in the United States. Pacific Auction Exchange, Inc. currently has close to 50 locations in four states: California, Colorado, Nevada, and New Mexico. Currently, there are three franchises in the SF Bay. PAX Inc. forecasts that they will have close to one hundred franchises by the end of 2007.
There are many upsides to Real Estate Auctions. The Assoc. of Realtors recognizes the potential of real estate auction as well, they have added them to their training and information sources.This blog will address all of the aspects of real estate auctions and how they can and will become a powerful tool for selling property now and in the future.