Real Estate Auctions - The New Land Rush

 

An energetic crowd gathers on the lawns of high-end luxury estates in Florida on a sunny afternoon. The air is filled with a loud, eager banter among an auctioneer and a group bidders and assistants. The auctioneer will ask for the highest bidder and they will respond. The bidders suddenly stop responding. In anticipation of winning, the high bidder holds his breath. Sedona Arizona Homes For Sale The auctioneer asks for another bid. He shouts out, loud and clear, to the crowd. The auctioneer then pauses and says, "Fair warning! Last chance!" In less than 10 minutes, another multi-million dollar estate was sold.

Real estate auctions such as the one shown above are a success all across North America and the Caribbean. Real estate auctions are on the rise. This is partly due to growing inventories and decreasing buyer confidence. Traditional methods used to sell properties in weeks. However, they are no longer selling. They are no longer able to attract buyers and sellers have lower prices. Although many believe the real estate boom has ended, smart sellers and buyers are still making money from real estate auctions.

Real Estate auctions work in both up and down markets.

Real estate auctions are transparent and open regardless of market trends. Real estate auctions that are properly conducted attract willing buyers and motivate them now.

Auctions remove the need to wait and see, which further reduces real estate prices. Buyers worry about overpaying. Because they are able to see the price that others will pay, buyers feel more confident in their real estate purchases.

Real estate auctions are able to sell properties at prices that are higher than what the seller would accept in a private sale. Many property owners use traditional real estate methods to sell their properties. They negotiate with only one buyer, leaving thousands of dollars in equity. Real estate auctions during up markets are the best way for you to determine the top market price.

Evaluating Your Real Estate for Auction

Every property and every seller is not a suitable candidate for auction. First, sellers must be willing to sell immediately and at the current market price. A real estate auction won't fix problems caused due to a drop in the market value of your property. If you owe more money than a willing buyer will accept, be ready to close with your checkbook.

High uniqueness factors are a key factor in selling properties at real estate auctions. Ask yourself, "What makes your property unique from all others?" You might have a luxury property, a resort property, or if you are a commercial property. Land and commercial properties also do well at auction. Uniqueness is what makes real estate auctions so successful. You don't have to make your property the same as everyone else's. The best thing you can do for your property is to offer it at the highest possible price.

Sellers must be realistic about setting a minimum bidding amount. To generate interest and urgency for a successful real property auction, a seller should look at the lowest comps and prices below it. You can see the selling price rise once the auction starts and the qualified bidders begin competing against each other.

Locate a Qualified Real Estate Auctioneer

Check with the National Auctioneers Association. This association has the best real estate agents. They are highly trained and follow a set of rules and ethics. The annual International Auctioneers Conference is attended by many. It showcases the most recent techniques and innovations in real estate auction.

Ask the company you are interviewing if they are a full-time real estate auction business. Although many real estate agents have been granted auction licenses, they are not familiar with the auction marketing method. A successful real estate auction is not the same as traditional (private treaty), real estate sales. Hire a professional real estate auctioneer.

An auction house that specializes only in real estate auctions is probably the best choice. Many qualified auctioneers have decades of experience selling personal property, such as furniture, dishes and rare paintings. Real estate is complex and should only be sold by experienced professionals in the field.

There may be fees and commissions that vary. Sellers must pay all marketing costs up front. Buyers typically pay 10% to the auctioneer. A portion goes to real estate agents.

Types Of Real Estate Auctions

Auctions work because they create a seller’s market. Professionally managed real estate auctions create urgency and a reason for buyers to act now. Before the auction, terms and conditions are set. These are the three main approaches to real estate auctions.