Which Properties are Suitable | The Auction Process | How to Select an Auction Company

Which Properties are Suitable?

Most properties can be sold at auction. Various types of real estate, including residential property, industrial property, vacant land and commercial property are sold at auction. However, not all property is suited for auction. To best evaluate your properties’ candidacy for auction analyze the three primary components: the property, the seller and the real estate market. If two or more of these components suggest using real estate auctions, contact us for a consultation.

Property
A good auction property has one or more of the following qualifications:
    The property is unique with strong buyer demand and/or limited supply.
    There is a strong owner equity position.
    There are high monthly carrying costs for the property owner.
    The property is difficult to appraise, needing competitive bidding to establish fair market value.

Seller
A good auction opportunity is one where the property seller is described by one or more of the following:
    Is auction-minded.
    Has confidence in the property to be sold.
    Knows it will bring a fair market price.
    Has a strong equity position in the property.
    Wants to avoid paying sales commissions.
    Requires a timely property sale that they control.
    Has high carrying costs associated with the property.

Market or Buyers
One or more of the following represent good auction opportunities with respect to the market:
    An “auction-like” atmosphere already exists due to limited supply.
    There is strong buyer demand for a particular property type (e.g. - waterfront property.)
    The real estate market and/or buyers are changing.
    There is a flat or declining market with little buyer interest for traditional property sales.

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The Real Estate Auction Process

1) Evaluate the property to determine if it is suitable for real estate auction. Most properties can be sold at auction. However, not all property is suited for auction.

2) List the property using an auction listing agreement designed for the auction method of marketing real estate. Note, this is a critical distinction.

3) The seller selects the date the auction will be held.

4) The real estate auctioneer develops a marketing plan.

5) The real estate auctioneer executes the marketing plan and markets the property for 3-4 weeks maximizing property exposure . The marketing effort is designed to create a sense of urgency that requires Buyers to act on the Seller’s time schedule.

6) Schedule a property viewing. Conduct one or two open houses that are two hours in length. This eliminates numerous and/or unscheduled showings while building a sense of urgency within the buyer community to purchase the property or lose the opportunity.

7) Develop an auction day strategy.

8) Conduct the auction on the day the Seller chooses.

9) Close the sale within thirty days using an escrow company.

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How to Select an Auction Company

When selecting a company to help you auction your property, be sure to pick a firm that:
    has a great deal of experience with marketing and selling real estate
    is familiar with your local real estate market.
    has an excellent reputation
    has legal contracts/documents that are approved by the department of real estate in your state and are designed specifically to support the auction method of marketing real estate.
    has the corporate support staff to handle all of your property needs

For more Real Estate Auction information, call TODAY: 626-321-4777
Pacific Auction Exchange / Accelerated Real Estate, Inc.

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