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National Association of Realtors View on Mainstream Real Estate Auctions

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Real estate auctions often experience unfounded negative images in the marketplace. The majority of auctions today don’t result from foreclosures of distress situations, but rather are the result of a seller choosing a cost-effective, accelerate method to sell a property.

Auctions allow the seller to eliminate virtually all long-term carrying costs, which allows the seller to either increase the proceeds at settlement or pass the savings directly to the buyer in the form of a reduced price. The result is a win-win situation; the seller obtains immediate cash and the buyer purchases the property at fair market value determined by open and competitive bidding.

A real estate auction is an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property—most certainly including those that are non-distressed—through open cry, competitive bidding.

Most properties are salable by auction. All types of real estate, including residential property (e.g., townhomes, condominiums, cooperative apartments and single-family homes), commercial and industrial property, vacant land and even boat slips are sold at auction. 

BENEFITS TO THE SELLER:

  • Buyers come prepared to buy
  • Quick disposal reduces long-term carrying costs, including taxes & maintenance
  • Assurance that property will be sold at true market value
  • Exposes the property to a large number of pre-qualified prospects
  • Accelerates the sale
  • Creates competition among buyers—auction price can exceed the price of a negotiated sale
  • Requires potential buyers to pre-qualify for financing
  • The seller knows exactly when the property will sell
  • Eliminates numerous and unscheduled showings
  • Takes the seller out of the negotiation process
  • Ensures an aggressive marketing program that increases interest and visibility

BENEFITS TO THE BUYER:

  • Smart investments are made as properties are usually purchased at fair market value through competitive bidding
  • The buyer knows the seller is committed to sell
  • In multi-property auctions the buyer sees many offerings in the same place at the same time
  • Buyers determine the purchase price
  • Auctions eliminate long negotiation periods
  • Auctions reduce time to purchase property
  • Purchasing and closing dates are known
  • Buyers know they are competing fairly and on the same terms as all other buyers
  • Buyers receive comprehensive information on property via due diligence packet

BENEFITS TO THE REALTOR®:

  • Generates a list of ready, qualified buyers
  • Offers clients and customers new selling and purchasing options
  • Increases revenue and market share
  • Develops your own market niche
  • Assurance that property will be sold at true market value
  • Property is sold within a relatively short period of time
  • Exposes the property to many potential purchasers
  • Auctions bring people in to look at all your listings, not just the auction listing
  • Successful auctions result in referrals and return business
  • Agents can earn commissions as referring agent/broker, cooperating agent/broker, or as the listing agent/broker

Contact Us Today

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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