Lately my telephone has been ringing off the hook, with sellers and real estate agents calling about selling their home and listings auction style. Without a doubt there is a common recurring theme that I hear from the seller as well as agents seeking to get their home or listings sold. So, I would like to explain what an auction can and cannot do with aiding in the sale of a home. The list below encapsulates the ingredients that must be present when selling and going auction style:
•1. A seller must be motivated, this includes price, and the property must qualify.
•2. The property must be prepared and is in the best condition possible.
•3. An auction is to sell the home not to test the water, so once decided upon a seller must be prepared to sell on the day of the auction.
•4. The seller needs to decide what auction type is the best. IE: Absolute, Minimum bid with reserve, Minimum bid with no reserve, or Reverse auction.
•5. Property is sold "As Is" "Where As".
•6. Property must have equity. All liens must be repayable upon completion of sale.
•7. Marketing time is approximately 4-6 weeks.
•8. Escrows are 30 days or less.
•9. A buyer pays a premium and it can range from 5-10% of the sales price. Which relieves the seller of paying a commission?
•10. Most importantly an auction is not the last option as a course of action on selling a property.
What I am hearing from sellers and agents alike is that they are turning to auctions as a last resort. Auctions are not good candidates for short sales, foreclosures and unmotivated sellers.
So, when thinking of doing a real estate auction --- the above list is brief and can without a doubt save you time when considering if the property is a good candidate for an auction. Keep in mind that an auction is a tool and can work, the auction must be compatible with both seller and buyer for it to be successful.
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