I am contacted all the time by agents who want to know how they get paid working with professional real estate auctioneers and would like to give the short explanation.
We offer seller agents 25% to 35% of what we (the auction company) make as referral fees. This works out to 2.5% to 3.5% of the high bid price and its paid at closing to the agent who referred the deal to us.
There is detailed information on our website by clicking here.
A properly advertised & marketed auction will deliver 100% of the present cash market value for a property 100% of the time.
Sellers are qualified by being required to pre-pay auction entry fees to cover the costs of marketing and producing the auction. The average auction entry fee is $3,495 for a typical residential home being sold at auction with reserve. It's $1,000 less if the seller can offer the property absolute with no minimum and no reserve price. Most people have a mortgage so they cannot legally advertise the auction as being absolute or with no-reserve, even though a number of unscrupulous auctioneers do so anyways.
There are only two times when a property does not sell at auction:
First is when one owes more than a property is worth. (this market has allowed short sales to come into play)
Second is when a seller is greedy and wants more than a property is worth. (ain't no cure for stupid yet)
Other than those two exceptions we sell 100% of the property offered at auction.
BUYERS AGENTS CAN EARN BIG AT AUCTION!
The auctioneer holds single agency or is an agent of the seller only by law & custom.
We offer buyers agents 2% to 3% of the high bid for representing buyers at the auction. Buyers agency is simple, yet complex which is why we offer a premium commission comparable to a "traditional" co-brokered sale.
The agent must register their buyer on our simple one page form that both the buyer & agent must sign. If the buyer attends a property preview the agent must preview the property with them and on auction day, they must attend the auction with their buyer and be present when the buyer signs the auction contracts.
Closing is usually done through the mail or at a title company and its in the best interests of the agent to stay on top of their winning bidder to make sure they close on the transaction.
Payment is at closing or settlement just like any other real estate transaction and payment is made to the agents broker of record and split on whatever deal you have with them.
We are always looking for qualified real estate auction sellers and will work with you to help bring in the listings.
Please feel free to call or e-mail if you or any agent would like to discuss any situation you may have in details.
One thing we do ask agents to remember; we are auctioneers and not magicians & can only deliver what a property is worth today, not June of 2005/2006 when it was worth 30% to 50% more.
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