On a sunny day in Florida, an energetic crowd gathers on the lawn of a top end luxury estate. A loud and eager banter between an auctioneer, a set of bidders and bidder assistants fills the air. For many moments that the auctioneer asks for the next greatest bid and the bidders react. Suddenly the bidders grow silent. The high bidder retains his breath in anticipation of winning the auction. The auctioneer requires yet another bid. And in less than 10 minutes a second multimillion-dollar estate has shifted owners.
Successful real estate auctions such as the one above are happening around North America and the Caribbean. Recently real estate auctions are on the rise, the increase in popularity is partially driven by growing inventories and fading buyer confidence. Properties that were selling in months using conventional methods are now languishing in the marketplace unable to attract buyers as seller’s lower costs. Many say the real estate boom is over but savvy buyers and sellers are profiting from property stocks.
Regardless of trends or market cycles, real estate auctions provide an open and transparent procedure for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act today.
The auction method removes the “wait and see” attitude which serves to further depress property values. Buyers are always concerned about overpaying. Buyers gain confidence with their buys at real estate auctions since they can see exactly what others are ready to pay.
When market demand is large and stocks low, real estate auctions can deliver selling costs well over what a willing seller would have approved in a negotiated private treaty sale. In great selling climates homes in Cebu using conventional real estate methods; negotiating with a single buyer at one time, leave tens of thousands of dollars of equity on the table. During up markets real estate auctions are the perfect way to establish top market cost.
Not every seller or property for this matter makes a good candidate for the auction. First of all vendors have to be prepared to market now and for the current market value.
Properties that do well in real estate auctions possess a high uniqueness factor. Ask yourself, “What makes my property different from most others?” Perhaps you have a resort property or high end luxury house, commercial properties and land do really well at auction. Real estate auctions thrive on uniqueness. If your house is like everyone else, the very best thing you can do is offer the most competitive cost.
Most significantly vendors have to be reasonable about setting a minimum bid. A seller have to look at the cheapest, most current comps and price below that to make the interest and urgency required for a thriving property auction. When the auction starts and qualified bidders start competing against one another it’s possible to watch the selling price increase.
Start by checking with the National Auctioneers Association, the very best property auctioneers belong to the organization. Many attend the yearly International Auctioneers Conference in which the newest techniques and innovations in the real estate auction industry are introduced.
Figure out whether the business you’re interviewing is a complete time real estate auction company. Many real estate agents are getting auction licenses nevertheless have no experience with the auction method of marketing. Conducting a successful property auction isn’t anything similar to (private treaty) traditional real estate sales. Proceed with a real estate auction pro.
You are probably better of with a auction house that specializes in real estate auctions. There are lots of qualified auctioneers that have generations of experience selling private property; furniture, dishes, lawn equipment along with the occasional rare painting. Selling property at auction is a intricate thing that should only be tried by full time experienced real estate auction professionals.
Commissions and fees may vary, sellers need to pay all advertising expenses up front and buyers typically pay 10 percent of the sales cost to the auctioneer where a share goes into participating real estate brokers.
Auctions are effective since they produce a seller’s market. Professionally conducted property stocks create urgency, a reason to purchase now and rivalry for the property. Terms and conditions of sale are created before this auction. Real estate auctions will follow one of these 3 approaches: