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.