Why not Pick the Day Your Sell? Try an Auction
By Richard W. Bronstein
If you are one of the many who is tired or frustrated with listing and waiting, this may be for you.
During our present recession, it is not uncommon to find quality properties on the market for extended periods. With the large number of foreclosures in other areas, and the increasing number in Western New York , there is little reason to expect the market to improve rapidly.
If you have looked at the current Multiple Listing System you might note how it is starting to resemble the metropolitan phone book. If time is of little importance you may be able to wait out the recession, if not read on.
Remember it costs you money to hold unneeded property. Taxes, maintenance and risk may be paltry when you consider the lost interest.
At auction property is generally sold as-is without any contingencies. While this might discourage the low down payment FHA – VA type of purchasers, auction appeals to the cash buyer.
Auctions attract many prospects not normally in the real estate market. Auction advertising is usually more intense than conventional advertisement. The marketing plans yield great exposure and invites people to view your property. It is an opportunity to attract more prospects.
If you are tired of making your property presentable on the spur of the moment, auctions generally only open the property for showing a period of time before the auction. This means you need only prepare once.
At auction, a substantial deposit is usually required, thusly eliminating many of the marginally qualified, and in sincere prospects. Selling as-is, without contingency, offers you a better change for the sale to close. At public sale the seller may dictate the terms. Often the terms are as important as the price.
At auction a seller may take advantage of competition. After all, it is the American way to be a “winner”. As in conventional real estate brokerage, it is competition, the buying public, who decide the value and the ultimate sale price.
There are two types of auctions: Absolute and Reserve. At an absolute public auction the property is sold to the highest bidder
For those a little faint-hearted or less sporting, those who need some assurance reserve or public auction may be the answer. At this type of sale the seller may specify a minimum and if it not met they may reject the bid.
Some of the best buys I have seen have been at reserve type auctions as the competition is a little less but the seller is serious, the buyer gets what he wants and seller gets what he wants. It is a win-win situation. Neither the purchaser or the buyer must pay the costs of wasted time and mortgage points. Time frequently saves or overcomes any price reduction at auction.
It is straight forward and open. No games, just direct application of the principle of supply and demand.
Although it is not the norm, properties have been known to bring higher prices than they were offered at privately. You might wonder why this occurs. It happens because there the sky is the limit, within reason of course. The increased exposure and increased competition makes this possible. In the unusual occasion when the sale price exceeds the listing price, the buyer is usually as happy as the seller. Auction helps to bind the best potential purchaser.
Reputable auctioneers do not usually accept properties with unreasonable minimums as it costs them a considerable amount of time and money to present property at auction.
Western new York benefits from a large number of qualified professional realtors who have well trained staffs. Sometimes properties need special marketing, that something special that creates excitement and motivates auction. Auction may be the answer.
We help our clients to benefit for the best of both worlds by listing auctions in the Multiple Listing System offering cooperation and commission sharing with other realtors. This brings the sellers better competition and generally higher prices.
Specialized marketing offering the greatest exposure to qualified prospective buyers is the forte of the auction method. Direct mail, signs, facsimile, broadcasting networks, periodical and media advertising as well as ML services are just some of the ways the sale of property is promoted at auction.
If you are interested, most auction firms are happy to provide you with more information on costs, opportunity and possible returns. Why list and wait when you can “Pick the Day You Sell” now.
Richard Bronstein, a state certified general real estate appraiser, is president of R.W. Bronstein Corp., an appraisal, auction and real estate firm (is a senior member of the National Association of Independent Fee Appraisers and the American Society of Appraisers with IFAS, ASA and CRA designations.