I am often asked by Realtors what type of Real Estate is best suited for a Real Estate Auction and the answer is: Property which is in Demand.
On the other hand, another question I am asked is who is the "Right" auction client? The right client is one that is goal oriented, decisive, willing to work to deadlines, communicative, tuned in, a partner, motivated and willing to let go and move on. Sound similar to a traditional sale?
To most Realtors the auction process is entirely new and rarely thought of as alternate and effective sales tool to get real estate SOLD. Zillow reported that the National Association of Realtors stated that by 2010 nearly 1/3 of all real estate will be sold with the Real Estate Auction sales strategy.
In the current marketplace the real estate auction competes aggressively with what buyers are looking for, that is, a guarded assurance that they are not paying too much. Auctions set the market price.
The real estate auction is beneficial for all parties. For the seller, the real estate auction is a way to sell assets at an accelerated pace and the Seller is typically protected with a "reserve". The inherent efficiency in the auction process enables the seller to eliminate carrying costs that include maintenance, taxes and insurance as well loss of opportunity costs. The resulting competitive bidding atmosphere gives the buyer an opportunity to purchase an asset at a price they establish.
An auction usually will out perform any other marketing methods for whatever is being sold. The excitement level is high throughout the gathered crowd, because only one person will be the buyer that day. Several people are confident they will be the buyer, but they are in competition with each other.
At its essence, the auction process is about competition. The auction event places bidders in a head-to-head contest for the privilege of buying your property. This competitive bidding process takes the guesswork out of pricing the property, so the seller does not risk setting the price too low or overpricing the property and having it on the market for extended periods.
Reasons Why Auctions Work ...
You need to sell the property NOW!
You want to obtain a TRUE market price.
You want a NON-CONTINGENT / AS-IS sale.
You want to significantly REDUCE HOLDING COST
You have a DEADLINE to sell your property
You want your property to stand out from all the others