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Richard W. Bronstein, Broker
IFAS, ASA, CRA, CREA, CREO
NY State Certified General Real Estate Appraiser
3666 Main Street, Buffalo, NY 14226
Phone: 716-835-7400
Fax: 716-835-7419
1-800-625-2500
Email: value@bronstein.net
Lucille J. Bronstein, Certified Buyers Broker
Associate Real Estate Broker          
Email: lu@bronstein.net

 

Auctions - Questions and Answers

 

1. What does "10 per cent Buyer's Premium" mean?That's a very simple concept. Ten per cent is added on to your purchase price, which is then paid to the auctioneer.

2. What if the property does not sell at the auction?
There are several reasons by a property may not sell at auction. In most instances, where sellers are realistic, we are able to negotiate a sale after the auction. Our firm has a full conventional real estate staff to work on the sale. We review the bidding and attendance. If we are unable to encourage the higher bidder(s) to increase their offer, we approach the back bidders. Since we register all attending the auction, we also have a list of many other prospects. In some instances people who missed the auction may call. This is an instances where Realtor-auctioneers can work hand in hand with other conventional Realtors.

3. Are there occasions when a property does not sell at Auction?
Yes. Properties usually sell at auction, but when they do not there are usually several explanations. 1. The reserve price was unrealistic. 2. The property was encumbered by subsoil pollution. 3. Cost to cure exceeds Market Value. 4. Inadequate competition due to specialized nature or excessive holding cost. 5. Fear of the unknown. 6. Loss of credibility. 7. Lack of financing. 8. Poor preparation. 9. Lack of marketability. 10. Poor auctioneer selection.

4. Is it better to Multiple List my property or to sell it at auction?
We like to say the choice is yours. LIST AND WAIT or PICK THE DAY YOU SELL AT AUCTION! Depending on the sellers motivation, the timing, the indebtedness, marketability auction may or may not offer more benefits than conventional sale. One of the ways we attempt to take advantage of the best of both worlds is by MULTIPLE LISTING OUR AUCTIONS. At auction you are not at the mercy of one offer or one bidder. We feel that offering sub-agency through Multiple Listings increase the exposure to qualified prospects and thereby increase the opportunity to maximize price. We are always happy to share 0 commission.

5.What about financing?
When we sell quality properties, we have members of lending institutions present to assist prospects and advise as to financing. We also encourage prospects to qualify in advance with the lenders who cooperate with us or the lender of your choice. Whenever possible we attempt to have the owner hold some of the financing. This reduces costs for purchasers and gives them more confidence to bid even if they do not need or are not accepting the financing. Since many of the properties we sell are in need of work, this allows purchasers to fix up and repair before applying to lending institutions. In some communities it is common to require prospects to show deposit checks before entering.

6. What is an Absolute Auction?
The classic Auction Concept where real estate and/or chattels are sold to the highest bidder regardless of price. This type of sale may be free and clear or subject to liens and encumbrances. It generally creates the greatest competition and thereby the highest prices. This type of sale is advertised as ABSOLUTE AUCTION, ABSOLUTE PUBLIC AUCTION, UNRESERVED ABSOLUTE AUCTION or UNRESERVED ABSOLUTE PUBLIC AUCTION.

7. What is a Reserve Auction?
Spotlight your property. The Seller may set a minimum acceptable price. Bids below this price may be rejected. This type of sale is advertised as PUBLIC AUCTION. It is our opinion that minimums or reserves be kept confidential. Experience has led us to believe that minimums, when known by other parties, tend to become maximums or to discourage auction attendance. Like an Absolute the Seller may dictate the "TERMS OF SALE".

8. Minimum bid?
A stated minimum or starting bid is announced or posted. This tends to discourage bidders who want to purchase the property for less than then stated minimum. Few people wish to pay more than a minimum and frequently it becomes a ceiling or maximum. We recommend that reserves be kept totally confidential.

9. Must I accept the high bid even if it is than I desire?
You may set a minimum or reserve price. If the bid fails to reach this point you may reject the bid.

10. If I reject the high bid, do I still have to pay the commission?
As long as the high bid does not reach the minimum, you may reject the bid and do not owe any commission. Although, you will still need to pay the advertising fee.

11. How are auctions advertised and promoted?
This first step is to create the marketing program to establish the area which will be most effective in contacting the greatest number of qualified prospects. Then the media are evaluated with an extensive amount allocated to the local papers as well as periodical, direct mail, signs, handouts at other auction, or Internet site, and specialty advertising.

12. When is the best time to sell?
In general there is no one best time. Certainly seasonal properties should attract the greatest competition during the season. For the most part, inclement weather is not a deciding factor. Many serious bidders are seldom discouraged, in fact, many come out believing they will receive a superior bargain.




 

 

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