Lawrence Auctioneering has conducted real estate auctions of properties ranging from modest starter homes to prestigious lake residences and hobby farms. Lawrence Auctioneering welcomes the opportunity to consult with property owners who might be interested in the auction method of sale. Here are some items to consider in selecting an auctioneer.
1. Find the right auctioneer.
You're selling a house, not a car, livestock or antique. Ask the auctioneer about his/her marketing plan. Good advertising strategy makes the difference. Find out about credentials. An AARE (Accredited Auctioneer of Real Estate) demonstrates the highest level of professionalism and most up-to-date information when it comes to selling properties. Inquire about ethics. National Auctioneers Association members must adhere to a code of ethics. Inquire about the auctioneer's familiarity with your marketplace.
2. Inquire about payment.
Some auctioneers charge the seller between 6 and 10 percent of the sales price as commission. Some split their commission between the buyer and the seller, the buyer pays a 5 percent auction premium and the seller pays a 5 percent auction premium. Still others charge a buyer's premium. Lawrence Auctioneering recommends use of a buyer's premium because it places the burden of payment on the buyer. Generally, the seller pays marketing fees upfront.
3. Choose between an absolute auction or auction with a reserve.
Selling your home at absolute auction means the highest bidder gets the home no matter what the bid. It adds drama and can often bring better prices because there's no turning back. Selling with a reserve requires the auction to reach a certain amount or there's no sale. It provides sellers an option in an unstable market.
4. Find out how bidders will be qualified.
Some auction companies require potential bidders to present a letter of credit from their bank or lender attesting they are creditworthy. Other companies simply ask for a certified check equal to a percentage of the sales price. The check is returned to non-winning bidders and forfeited by the highest bidder if he/she does not close. Lawrence Auctioneering recommends the use of both a letter of credit and certified check.
5. Determine how bids will be accepted.
The tried and true method is "on the lawn." Bidders stand outside while the auctioneer calls the bids. Increasingly more auctioneers have used ballroom sales where hundreds of properties get sold at once. While the ballroom approach may attract more people, the downside is that an individual property won't get as much attention. Lawrence Auctioneering treats each property as its own distinct sale. To encourage more bidding, Lawrence Auctioneering accepts sealed bids in advance, as well as telephone and Internet bidding from pre-qualified bidders.