My husband has his auctioneer license. We are adding auctions as an option when we do a listing presentation. We truly believe having a seller doing a round robin auction is a great way to stir urgency in buying a property. You put a property on the market without a price but an "AUCTION" word where the list price would be. You have a few open houses on maybe two weekends and set a Sunday night to do the auction by telling the buyers to sit by their phone. The way the auction works is the potential interested buyers are numbered for example from 1 to 10. Buyer 1 is called first and asked to give a bid of what they would like to put on the house. Buyer 2 is called next and told what Buyer 1 has offered and asked if they would like to put a bid higher than Buyer 1. If Buyer 2 decides to bid higher, then Buyer 3 will be called next and the cycle continues. But if Buyer 2 doesn't want to bid higher than the previous Buyer's bid, then Buyer 2 is out of the auction and Buyer 3 is called next. Once the auction passes the last buyer call, Buyer 1-10 are called again until there are no other bids left on the property. You get the picture.
Of course the buyers previous to participating in the auction, need to fill out an auction application and put a deposit in to ensure their commitment to participating in the auction. If they don't get their bid accepted, then they get their check returned to them. I think the round robin auction is especially great for short sales because the paper trail is a great tool to present evidence to the third party approver, or the bank, that the offer they want to get approved was the highest bid out of so many buyers. Sellers need to get all the help they can. Buyer agents representing the buyers in the auction will still get paid because they will help them with the rest of the buying process. It is a win win solution.
Especially with the higher priced homes that are not selling as quickly, a round robin can be the solution in getting a short sale started and prevent foreclosure for that homeowner. With most sales happening at first time homebuyer prices, the higher end homes are not selling as easily. Let's face it people are economizing and not buying more than they can spend anymore. I think as a country we are finally realizing that more than you need can be lost rather quickly when you lose your job.
Auctions can become the solution to knowing right away if a property can be sold because it causes buyers to make their mind up by a certain date. They are not able to mull over it while they check another 20 homes thinking it will still be there because it won't.
Of course for homes that have become stale, it is up to the seller's urgency to sell, to determine if the seller will try an auction at the last resort. Of course the seller may have a minimum bid, or lowest bid he can consider, or just sell the home to the highest bidder to get out of that situation and move on to the next house. The next house is where the seller will make his/her money. IF the seller gets a bid they did not expect but they can still pay the mortgage and use the equity toward a down payment on the next house, it would make sense to do so if you need to move to the next home and downsize or upsize.
Life obviously goes on with or without you. People need to realize this and stop getting hung up on the money that the house could have made them.