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Real Estate Auction v. Traditional Sales Method

A real estate auction puts more money in the Sellers pocket at the closing by putting the Seller is in total control of the entire sales process, the very opposite of a traditional sales method. The Seller sets the sale price with a predetermined acceptable minimum sales price (the Reserve) which eliminates any downside for the Seller. The Seller sets the date of the auction and the property is sold in “As-Is condition, with no contingencies in 30+/- days.

Buyers will make offers before the auction date because they do not want to take the chance of losing the property at the auction. Upwards of 30% of auction properties, are sold before the auction date. An auction creates an urgency that stimulates action. At the auction, the open and competitive bidding will drive the sale price up, never down.

The traditional sales method is actually an auction. The Seller sets the sale price and if there are no offers, the price is lowered and lowered and lowered, until a Buyer makes an offer. This is known as a “Dutch Auction” or a “Reverse Auction”. The traditional sales method puts the Seller at the mercy of the Buyer throughout the entire process. The Seller typically agrees to a price lower the already reduced asking price to make a deal and then, the Seller has to get through the financing and home inspection contingencies.

The home inspection is an open invitation for the Buyer to terminate the contract or renegotiate the sale price further down. If the Lender’s appraisal does not warrant the sale price, the Buyer can terminate the contract or renegotiate the sale price down even further. If the Buyer decides to walkway during the contingency period, the Seller has to start the entire process all over again and incur more carrying costs. Moreover, in the volatile world we live in today, a Seller is always at the risk of a market shift impacting the real estate market as we have seen with the Coronavirus.

Selling real estate utilizing the traditional method is equivalent to fishing and the Seller is the fisherman. The Sellers bate is the asking price and then Seller essentially drops the line in the water and waits for the fish to bite. Even when the fisherman has a fish on the hook, there is no guarantee the fish won’t get away. Who is in control, the fisherman, or the fish….the Seller or the Buyer?? With an auction, the fisherman is using a net and brings in a number of Buyers together to engage in open and competitively bidding that drives the sale price up, never down!

When Is The Best Time To Auction Real Estate?

Auctioning a property when it first comes on the market has tremendous advantages over the traditional sales method. Statistical data clearly indicates that the highest amount of interest in a newly listed property is in the first 30 days of when a property is first placed on the market. 

An auction of a property in the first 30 will often deliver better results for a Seller over the traditional sales method. Auctions do not cap or limit the sale price that the traditional sales method does. The excitement that comes with an auction delivers completive bidding that will drive up the price often beyond the traditional “fixed” asking price determined with the traditional sales method. In addition, auctioned properties are sold in “as is” condition with no contingencies and close in 30+/- days from the auction date. Auctions eliminate the Sellers carrying cost and the entire auction process takes 60 days+/- from the listing date to the closing.


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The real estate market is ever-changing. A Buyers’ market can become a Sellers’ market overnight. Real estate values are often determined by the season, the economy, and major events taking place locally, throughout the region and around the world. We’re here to guide you though the process and figure out which method is best for you.

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