Benefits of Using A Professional Auctioneer Service
I'm often asked why use a professional auction service. I have provided the following information to help you understand how auctions work and information as to why they are a great choice to effectively, quickly and profitably move and liquidate real estate and merchandise in to cash.
When you say you want to "sell it," what you can expect to hear from me will be my final word on the matter -- SOLD!
Have a question that I've not provided answers for here or elsewhere on this web site? I'll be happy to discuss or answer any questions you might have for your particular needs. I am here to help you - please feel free to use the contact information provided just below in the left column.
Whether you’re someone that has never used or been to an Auction before and need a good primer or introduction to ‘Auctions 101’ or if you are familiar with Auctions but just need a bit of a refresher on the benefits of buying and selling by Auction, here is useful information that will answer a lot of your questions.
For The Seller | For The Buyer | Frequently Asked Questions
The Benefits Of An Auction for Sellers:
- Buyers most often come prepared to buy – they want the items
your selling!
- Auctions reduce long-term storage and carrying costs by speedy liquidation - including taxes, maintenance and depreciation.
- Auctions often exceed your value expectation, fueled by
competitive bidding.
- The Seller has a reasonable expectation of knowing when the merchandise will be sold.
- The Seller can contribute input on the terms and conditions of the auction.
- An Auction insulates the Seller from the "price negotiation" trap.
- An Auction assures an aggressive marketing method so as to increase buyer interest and most often an Auction provides higher profits.
- By nature of the atmosphere of Auctions, they often create
buying frenzies and stimulate competition among buyers.
- The competitive nature of bidding influences the judgment of buyers. In plain language – where two or more buyers want that same item, the competitiveness and public nature of the event
most often drives prices higher.
- With an established history of thousands of years, Auctions are
still the best form of marketing.
- Competitive Auctions offer confidence that you are getting a fair market price for your items.
- A Professional Auctioneer doesn’t cost you money, they make you money - and quickly.
- Buyer’s don't have the convenience of procrastination – if they wait, they may miss out on that special item. But no need to worry about not getting the most you can get, the Auctioneer wants to get the most that can be gotten so they always give Buyers enough opportunity to get in their last bid before the hammer is dropped and they hear the term “SOLD!”
- Most often, the highest net dollar possible for your assets can be realized by the use of an Auction.
- The Auctioneer handles the the complete marketing and advertising for you -- including advertising of your auction and merchandise on this web site.
- Quick, Profitable and Easy - the simplest explanation of what an Auction is. An Auction can be used to liquidate just about anything -- Personal Property, Real Estate, Commercial, Industrial, Manufacturing and Agricultural goods, business inventories - the options are endless.
The Benefits Of An Auction for Buyers:
- Through competitive bidding, Buyers are assured a smart investment has been made at a fair market value.
- An Auction assures the Buyer that the Seller is fully committed to the sell of the merchandise.
- Buyers can use their own judgment to determine the final purchase price.
- Auctions establish an efficient means for the purchase of merchandise.
- Auctions establish a level playing field. They provide Buyers with the confidence in knowing they are competiting in an open forum on the same terms as all other buyers.
- Having an open and public Auction is the best guarantee that the Buyer is paying a fair market price for the items being sold.
Frequently Asked Questions About Auctions
Personal Property Auctions | Real Estate Auctions | Top Of Page
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Q & A About Personal Property Auctions |
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Does it cost anything to attend an Auction? |
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There is no charge to attend an auction - the only charges that occur are those you have incurred when you place and win the bid on one or more items. |
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How do I bid on an item being auctioned? |
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The first step is to get registered and get your bidder’s number - this takes only a few moments. Generally, registration can be done during the allotted preview time (usually 1 to 2 hours before the auction starts). If the auction is in progress when you get there -- don't worry, you can still register.
Next, is the actual bidding on items. When you see an item that the auctioneer is calling bids for, you simply raise your hand or bid card to raise your bid above the current high bid amount. This is usually the amount being requested by the auctioneer. On rare occasions someone may call an amount above the current bid. This is a tactic that is used trying to ‘Up The Ante’ and scare off other bidders.
Finally, if you are the winning bidder, hold your bid card up to display your bidders number so it can be recorded by the auction clerk. |
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How much should I expect to have to pay for any given item? |
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This question does not have a one-size-fits-all answer. The selling price is dependent on the item being sold (tractor, truck, equipment, jewelry, antiques, etc). Other determining factors include such considerations as condition, appeal, uniqueness & collectibility. And, the always unpredictable factor of ‘What The Market Will Bare’. In other words, the final selling/bid price for an item is dependent a great deal on how badly two or more bidders want the item(s) and how much are they willing to pay to become the winning bidder. |
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When I have finished bidding, can I pay for my purchases at that time, or do I have to wait until the auction is over? |
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You can choose to pay for any items once you’re through bidding and the clerking sheet for that item or items has been delivered to the cashier. This may take up to ten to thirty minutes. |
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What form of payment is accepted at a personal property auction? |
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Winning bidders, can pay in cash or local personal check with appropriate identification and approval by the auctioneer or cashier. |
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Do any items purchased at an auction come with a warranty? |
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Generally, No, All items being bought are sold "As Is" and "Where Is". Neither the Seller nor the Auctioneer offer any warranties or guarantees*.
*As with most any given situation in life, there may be exceptions to almost every rule. For instance, if the item's manufacturer offered a transferable warranty and the item is still under warranty, then with the sell of said item, such remaining warranty could be transferred to the 'New' owner. Or, in an instance where an item requires electricity to see if it will ‘power up’ (such as a power tool, appliance or TV) we will
generally allow a winning bidder 5 minutes to test the item before
it leaves the premises. In the event that the item did not work, the sale and the clerking ticket would be voided.
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What are the differences between an Auction verses a Tag, Yard or Garage sale? |
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First off, it is reasonable to expect that at an Auction, just about EVERYTHING will be sold. An Auction is an opportunity to quickly sell or liquidate property of all types & kinds by an open verbal or written exchange in which the property being offered is sold to the highest bidder. In this method of marketing, the selling price is determined by the Bidders/Buyers.
At a Tag/Yard/Garage sale, the Seller predetermines the selling price. This method of setting prices is to a great deal subjective and is often skewed by the sellers sentimental attachment and/or their perspective of the items worth or need. But wait - keep in mind, the Seller has already decided they don't need or want it, so their subjectivity as it pertains to the said value can be often over or under the items true market value. The real downside of this method of selling is that items that are seen as under priced to buyers will sell to the first interested party and overpriced items are often left unsold to be stored, given away or discarded.
By taking advantage of an open, enthusiastic and competitive bidding process to attain the highest possible market price for your merchandise, Auction prices are set by ‘What The Market Will Bare’.
Auction marketing is a powerful and proven successful method to liquidate property. Hubbard Realty and Auction can sell your personal property (antiques, household, equipment, vehicles, etc.) on-site or at local facilities. Real Estate & Business Liquidation Auctions are generally conducted at the location of the property to be sold.
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Can smaller amounts of items or liquidations be sold at auction? |
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Yes, often partial estates and/or consignments are combined to create ‘Big’ Auctions. By doing this, sellers that may be selling a single item or only a few items can be consigned with one or more other Sellers and included in an upcoming auction.
One advantage of this method is that expenses can be shared with other sellers and because of offering a bigger lot of sale items, the Auction may attract a bigger audience. |
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What kind of people attend Auctions? |
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To a great deal, it depends on what type of Auction it is and what type of items are being offered. Is it personal property, farm equipment, or a real estate auction? Or, even better yet -- all of them together?
Real Estate auctions will attract real estate investors, first time home buyers, people looking to buy and move to or vacation in the area, etc.
All kinds of people from all walks of life come to personal property Auctions. You'll see antique dealers looking for merchandise to stock their stores, home computer users looking for items to resell on-line, homemakers decorating their homes, people looking for deals or area farmers and equipment dealers looking for farm implements. In general, there are all kinds of folks at Auctions and they’re there looking for what you have to sell.
Because Auctions are marketed through various means including area newspapers, on the radio, on this web site., at other public locations by way of flyers, at local businesses and antique shops and where warranted, in regional and national trade publications like Antique Week, anyone and everyone may decide to come out on any particular day to bid at your Auction.
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How soon can I have my Auction? |
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As a general rule of thumb, you will need to allow a minimum of two to three weeks so as to allow enough time for maximum exposure and promotion of your Auction.
Hubbard Realty and Auction can help you make this decision.Call today for a free consultation to discuss the details of preparing your Auction!
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Q |
If you do my Auction, how will you sell my property? |
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Of coarse we do all the pre-Auction promotion and marketing to get the people there -- including printed flyers, newspaper and radio ads, web-ads, signs and more. However, this is just part of the selling of your property, what we do the day of your Auction is just as important.
We create an Auction atmosphere for buyers. We do this by taking the time to set-up and display your items in the best manner possible. This is done to gather similar interests and like bidders together in order to encourage, promote and obtain the highest prices possible. In general, items are displayed with other like items. For example -- household items will be displayed together, items like kitchen appliances silverware and place settings. Hand & shop tools, nails, screws and bolts will be staged in an area together, etc. By using these techniques, the Auctioneer will be able to promote competitive bidding as the Auction heats up. That's part of the fun and excitement of an Auction. People get to see aggressive bidders ‘out-bid’ each other until there is a ‘Winner’. |
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What will you be doing the day of the Auction? |
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First off, we'll be out early getting signs put out so people can find your Auction and if the plan is to have your Auction on-site, we’ll get there early enough to prepare and set-up for your Auction. This includes staging items such as furniture, tools, equipment and boxed items. We can provide tables for these. We'll determine the ‘flow’ of the Auction so as to best maintain continuity and interests of items being sold as well as the crowd flow for quick and easy access and exit from the house, garage, sheds, barn(s) yard and/or fields.
We'll be prepared with enough hands to efficiently get the job done. Beyond the Auctioneer, the auction crew consists of a well prepared cashier, one or two ringmen, and a very capable clerk to record all items being sold.
In some instances, a catering service (at no additional cost to you), as well as restroom facilities, may also be put in place prior to the Auction. Our job doesn’t end when we sell the last item. We will also clean up after the Auction -- we see to it that you won't be left with a mess. And, we will provide you with a final settlement and accounting of the event as well as your proceeds. |
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What is my involvement and what do I have to do? |
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Basically, you need to make two decisions.
1) What do you want to sell? And;
2) Are you ready for Hubbard Realty and Auction to get started with the preparation of your Auction?
Beyond that, T. P. can take care of the rest. Whether it will be held at a local facility or it will be an on-site Auction, T. P. has all the necessary supplies on-hand to set-up your Auction and make it a success. You may choose to pack your own merchandise to save on labor expenses -- we'll be glad to show you how. Or, we will be happy to pack your items and prepare your items to be sold for the auction at a nominal cost. These costs are deducted from the Auction proceeds, there is no ‘up front money’ required.
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T. P. understands your need to sell your property as quickly as possible -- whether it be real estate, personal property, equipment or a business liquidation. He has built his business and reputation by providing individual and personal attention to meeting the needs of each of his customers. You can take the first step by contacting T. P. today!
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Q & A About Real Estate Auctions |
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What Is A Real Estate Auction? |
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A Real Estate Auction is a non-conventional way of buying and selling real estate. It is a proven method with a long history. The biggest advantage is that it accelerates the purchasing process by the use of an auctioneer.
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Are there Benefits to having a Real Estate Auction |
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Yes! A Real Estate Auction is a win-win scenario for all parties involved. Since the auction sale is held in an open forum, both motivated buyers and motivated sellers are assured the property's true & fair market value will be reached through the competitive bidding process.
The Seller is able to dispose of properties in an efficient, timely manor that saves on long-term carrying costs including interest, real estate taxes and maintenance & upkeep and the Buyer is able to take advantage of a smart investment at a fair market value. |
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Are all Properties suitable for and can they be sold at Auction? |
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Not all. However, most properties are salable by Auction. Residential properties such as single family homes, ranches, farms, town houses, condos, multi-family apartments, commercial properties, acreage/land, resort properties and even boat-slips & time-shares can be sold at auction.
Generally properties that are marketable, do well at Auctions.
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What should I expect from a Real Estate Auction Company? |
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A Real Estate Auction company should:
1) Know the market. and;
2) Be experienced enough to evaluate the property to ascertain a reasonable expectation of
success for both the buyer and seller.
3) Be able to implement a comprehensive marketing effort. |
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Is it possible to still market a property if it doesn't sell at Auction? |
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Yes. You are actually at an advantage at this point. The effort applied in the Auction Marketing of your property has already increased the exposure of the property and identified a large segment of interested buyers. Many of these buyers may not always be comfortable with purchasing through the auction process, but may still yet want the property. More often than not, one or more may come back and make an offer after the Auction date. Other times, acceptable offers to buy the property in advance of the Auction are made and accepted. |
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Does an Auction assure me a fair market price? |
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Yes! The true & real measure of the value of real estate at any given time, is what will it bring under competitive bidding from informed and motivated buyers. In other words, the only genuine measure of fair market value is what someone else is willing to pay for the particular Real Estate in question at any given point in time.
An appraisal is not a de facto measure of worth. It is merely an informed opinion based on previous area market conditions and sales. It is not an absolute true value nor is it an offer to buy. |
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Do Real Estate Auctions depress area home values? |
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No, not at all. Real Estate Auctions reveal the true market value of a property. Because Auctions are conducted in an open and competitive forum, all bids are known, participants receive immediate feedback on the the market value of the property and bidders are provided with the opportunity to raise that value based on desire & demand. At Auction, values tend to settle at the level the market can bear, neither elevated nor deflated. |
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Is it true that real estate auctions are often thought of as a “fire sale” or “liquidation sale” for someone unable to meet their mortgage payments? |
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Yes. Though, other forms of auctions such as fine art or antique auctions, have a very positive image, Real Estate Auctions in the past have unfairly suffered from this often unjustified misconception. Simply stated, Auction Marketing is a GREAT way to sell Real Estate. It's efficient, quick and when all factors are considered, it provides a reasonable expectation of attaining a fair market value for your property that is at-least-as-good-as the expectations provided by more traditional real estate marketing methods.
In today's fast paced society, the majority of Auctions are no longer the result of a “fire sale” or “liquidation sale”. More often than not, they are smart sellers -- builders, estate homes or financial institutions -- who have chosen an accelerated & more cost effective method of selling a property rather than dealing with the time-consuming hassles of reviewing and evaluating offers one at a time over a period of months or even years.
An Auction accelerates the sale and eliminates virtually all long- term carrying costs. These cost savings are passed along directly to the purchaser. A Real Estate Auction is truly a win-win situation. As the property owner, you can move on with your life, developers can move on to their next project, and buyers can purchase a quality piece of property at a fair market value. |
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What are the determining factors for the success of a Real Estate Auction? |
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Much like the factors of any property being sold - it’s the overall desirability. This overall desirability includes:
• The location, condition and the surrounding properties/area.
• An aggressive marketing and advertising plan to prospective
buyers.
• Realistic expectations on the part of the Seller and Buyer.
• Selection of the type Auction that best suits the property and
Seller's needs.
• A professional Auction effort and follow through on the closing
process.
• Undertaking due diligence before hand so Buyers are informed.
• Attainment of a fair market price, agreeable to both Seller and
Buyer. |
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How is a Real Estate Auction advertised? |
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There is not a one-size-fits-all answer to this question. Today's Auction marketing plan can vary greatly depending on a number of factors including:
• Property location
• Type of property
• Value range of the property being sold
The one element that holds true for any successful Real Estate Marketing plan -- Auction or otherwise -- the larger the Seller’s expectations are, the more aggressive the marketing program has to be to reach those expectations.
Auction marketing has proven its worth as a time-tested method. It requires an intensive effort and well-timed, thought-out plan to create a massive interest in the property for sale. Hubbard Realty & Auction has the expertise to develop a plan and strategy to reach the target audience of buyers that need to be reached.
In today's cornucopia of advertising media there are various forms of advertising available:
• Sale bills or brochures mailed directly to prospective
purchasers and posted in public places
• Newspaper advertising in local, regional and possibly
national papers
• Ads in trade publications, magazines and/or newsletters
• Radio, Cable and/or Television ads
• Signs posted on the property and/or area Billboards
• Phone solicitation
• A Web-Ad on this site
• Notices to our eNews subscribers
Hubbard Realty & Auction knows which forms of advertising are best for a particular type of auction and its location and will facilitate everything from budgeting, preparing the advertisements and placing them in desired forms. The more aggressive advertising forms are able to target larger groups of Buyers to come and competitively bid on property thereby yielding true fair market value for a Seller's holdings.
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Q |
About how long does it take to market the property, have the Auction and close the sale? |
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In general, the time frame can vary depending upon the type of property, or the number of properties to be auctioned or in the case of a business liquidation, the amount & type of inventory, equipment, etc. Generally, you can expect the process to take between 30 to 90 days from listing to closing. The actual Auction itself can vary anywhere from twenty minutes for a single property to becoming an all day event on a multi-property auction or business liquidation.
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When selling a property or liquidating a business at Auction, what are the Terms of Sale? And Who Sets Those Terms? |
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Generally, the Seller sets the terms with the guidance and consultation of Hubbard Realty & Auction and in some instances, the Sellers Attorney.
General terms included in the Auction contract are as follows:
• The ‘Deposit/Earnest Money’ (usually a percentage of the
purchase price or a stated set amount)
• Execution of a Purchase Contract between Buyer and Seller
immediately following the auction with the following basic
terms:
Closing with the balance of the purchases price due at
closing to be set within 30 to 90 days
Seller generally provides title insurance and is responsible
for Auction and Marketing Costs
Properties generally sell "As Is" with no warranties
expressed of implied
Due diligence is done in advance of the sale such as preparation of information packages and inspection reports. The issue of price is set at Auction.
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If at a later date the buyer decides not to buy the property, what happens to the earnest money? |
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If the Seller was unable to close because of defective title, etc., the Buyer's deposited would be refunded immediately. If the Winning Bidder/Buyer was unable to complete the sale regardless of the reason, their earnest money/deposit would be forfeited. |
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How much can I expect my Property Auction to cost? |
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Auctioneers, much like other Real Estate Brokers, charge a commission, which is set up front. This is based on a percentage of the sale price. In addition to this fee, marketing and promotion expenses and any other out-of-pocket expenses that are incurred in conducting the Auction are paid by the Seller or in some cases some portion of costs may be paid with the ‘ Buyers Premium’. |
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What are the various types of auctions? |
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Basically, there are four different types of auctions:
1) ABSOLUTE AUCTION (sometimes referred to as Auction Without Reservation). With this type of Auction, the property -- regardless of the price -- is sold to the highest bidder. The biggest advantage of the Absolute Auction is that it generates the maximum response from the market place. With the ‘regardless of the price’ guarantee of sale, the excitement and participation amongst Buyers is increased. This type of sale will often attract novice Buyers, as they perceive that they are not being locked into paying more than they are willing to bid and it gives the perception of a more open, less restricted Auction as well as the chance of getting ‘A Deal.’
The ‘regardless of the price’ guarantee of sale to the highest bidder often makes the novice Seller feel nervous because of their perception of being exposed to risk, despite the fact that this type of Auction generally attracts a larger number of Buyers and more often than not, high bid offers. In spite of this anxiety, this type of Auction offers the greatest opportunity for the highest bid due to the stronger number of bidders participation that it generates. In simple terms, the more the participation the greater the chance of ‘Fueling The Fire’ or generating a ‘Feeding Frenzy’ environment.
One last note, many estate properties, financial institutions and government agencies use this method because it generates an enthusiastic Buyer participation and response.
2) DUAL BID - Initially, Buyers submit sealed bids. The highest sealed bid then becomes the opening bid of an open Auction. The biggest advantage of this method is that the Seller is able to ‘Get A Feel’ for the market and interest for their property. They can then have an opportunity to make adjustments up or down as to their expectations.
3) MINIMUM BID - The minimum price is always stated in the marketing, i.e. brochures, in the advertisements, etc. and is announced the day of Auction. The Auctioneer will accept bids at or above a pre-disclosed price. Another alternative approach to working toward a Minimum Bid is to state a ‘suggested opening bid’. However, the opening bid does not commit the Seller to that price.
Unlike the ‘Absolute Auction,’ the advantage to selling via the minimum bid method is that it provides the seller with a safety net. This limits the Seller's risk in that the selling price will be above a minimum acceptable level. The trade off is that the Seller may want to consider the lowest possible selling price in order to entice and motivate Bidder participation.
The two main disadvantages to this type of Auction are:
• If the minimum bid is too high, the Seller may limit interest in the auction to only those Buyers willing to pay that amount. and;
• If the minimum bid is too high it dampens or removes the perception of a ‘Real Deal’. In effect, it makes it difficult to generate an environment of excitement - in other words, it may have the same effect as ‘throwing cold water on the fire’ or calming or removing the ‘Feeding Frenzy’ atmosphere that can be generated at Auctions sometimes.
4) AUCTION WITH RESERVATION - In this type of Auction, the Seller predetermines the minimum selling price that the Seller is willing to accept. This minimum bid may or may not be posted, and the Seller reserves the right to accept or reject the highest bid within a specified time. This may be anywhere from immediately following the auction up to 72 hours after the Auction's conclusion.
The advantage to the Seller is that they are not obligated to accept a bid below their minimum. The Disadvantage to the Seller is that it is certain to limit Buyers because prospective Buyers may not want to invest the time and expense of investigating a property -- the main reason is that because even if they are the high bidder they still have no certainty that they will get the property. In effect, the ‘Auction With Reservation’ then becomes a situation whereby the ‘High Bid’ is reduced to an ‘Offer To Buy’ -- not a sale.
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What is A Buyer's Premium? |
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A Buyer's Premium is like a surcharge to the Buyer/Winning Bidder and is usually used to cover Auction expenses such as marketing costs. The specific Terms and Conditions of the Buyer's Premium is generally stated in the Property Auction Bidders Packet and will usually be expressed as a percentage of the winning/high bid. This percentage will usually range from 2% to 15%.
Bidders should always study the Bidders Packet prior to the start of the Auction. Prospective Buyers/Bidders must consider the impact of the Buyer's Premium when deciding on the amount to bid for the property.
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Are there advantages for the Seller in a Real Estate Auction? |
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Yes. The first and most important is Bidders come mentally prepared to buy the day of the Auction. Other ways the Seller benefits is a Seller gets the maximum exposure for their property. A Real Estate Auction creates a sense of immediacy -- a Bidder is placed in a position of knowing that if they are not the high Bidder, it may be their last chance to purchase that property. The Real Estate Auction creates a ‘quick’ cash flow for the Seller. It minimizes high carrying costs such as insurance, real estate taxes, security and maintenance. And finally, the Seller is able to benefit from the immediate use of their funds -- including other investment opportunities or real estate. |
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What else should I know as a Seller? |
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Through the Real Estate Auction, the Seller is better able to maintain the control of the sell. If properly priced, they can expect their property will sell on a certain date and they will have their funds quickly.
For some high dollar properties, the Seller may want Bidders to pre-qualify in order to establish minimum financial means and/or eliminate ‘Lookers’ by the utilization of a deposit -- either Certified Check, Cashier's Check or Bank Letter of Credit.
The strategy used in marketing for a Real Estate Auction differs somewhat from the strategy employed in a conventional Real Estate sale. It is more concentrated to be more intense and create a higher visibility. |
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Are there advantages for the Buyer in a Real Estate Auction? |
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Yes. First off, the Buyer knows the Seller is committed to to the sell of their property. The Buyer can be confident that the property is being purchased for fair market price. The Buyer can feel comfortable with the purchase knowing that other potential Buyers willing to pay about the same price for the property. A Real Estate Auction assures the Buyer complete control over what the Buyer is willing to pay for the property.
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| Contact T. P. Hubbard today and let him help you with your Auction. |
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