Auctions represent an opportunity to accelerate real estate market. On average, real estate auctions are marketed for 4-6 weeks once a listing agreement is signed until the actual sale date. Prospective buyers bid on price alone - all other terms are set.
Marketing is critical because an auction relies on competive bidding - the more buyers, the more bids, the higher the price goes.
Real estate auction companies are marketing specialists. They don't have to establish a list price or estimate market value. However, they do have to make sure that the auction property has been heavily promoted, advertised and marketed. The fact that an auction date has been established adds a sense of urgency to buyers and requires them to take action.
Typically, property owners up front the marketing expenses (avg 1-2% of the expected market value of the real estate) - which is used to spread a wide canvas over potential buyers to generate interest. The marketing includes a combination of print, internet, direct mail, internet, tv/radio, etc. Most auction companies provide sellers with a line item report of the marketing expenses after the sale.
In a slow market, an auction provides an opportunity to sell within 30 days and closing is typically another 30 days.
Comments(0)