What is an Auction?
An auction is an accelerated real estate marketing process that involves the public sale of a property—including those that are non-distressed—through open cry, competitive bidding. They allow for a smooth and time specific transaction that puts the seller in control. Our team will go to work for you to bring the highest possible price for your property encouraging high energy, and competitive, spirited bidding before and during the auction.
Types of Auctions:
• Absolute or No Reserve: The property for sale will be sold regardless of price, which in our opinion is the mostprofitable and successful outlet. From the seller’s perspective, although intimidating, advertising an auction with no reserve price can be desirable because it attracts a greater number of potential buyers due to the possibility of
a bargain. When more bidders attend an auction, there is a greater likelihood that a higher price can be achieved
due to the heightened competition from bidders.
• Reserve Auction: The property for sale may not be sold if the final bid is not high enough to satisfy the seller. The reserve price may be fixed or discretionary (also known as seller confirmation). The decision to accept a bid that is under the reserve is to be confirmed by the seller, who may accept or reject it. A reserve auction is safer for the seller but tends to discourage potential buyers interested in the property. An additional type of reserve auction is known as a “published minimum bid” auction. This is where the reserve on the property becomes public knowledge. The key to the success using this method is finding a minimum price that is desirable to potential buyers as well as maintaining an adequate price margin for the seller
Why Sell At An Auction?
• Property is Sold for Cash at True Market Value: This includes minimal seller involvement and there are no contract contingencies. The final bid price is set by the market and a properly promoted auction will provide competition to insure the seller receives top dollar results. All types of real estate are able to be sold at auction!
• Accelerated Marketing Strategy: The marketing and promotion of the property is concentrated into one specific time frame, opposed to a traditional listing period which may be months or longer.
• Time Efficient Sales Mechanism: The property will be sold on a specific date. Auctions bring all interested parties into one place at the same time for a single purpose, to determine who will pay money the most for the property. All interested parties are forced to make a decision right then and there. Auctions are typically closed within 45 to 60 days of an executed auction sales agreement.
• Competitive Marketplace: Auctions provide true market value by offering competitive bidding, enthusiasm and excitement. With competition, each bid reinforces the market value of the property. This affirmation of value encourages other participants to continue bidding, which means more money for the seller.
• Maximum Exposure of Property: Auctions accelerate and increase buyer traffic through the subject property. The Lane Auction Group gets properties sold by using our comprehensive marketing campaign. We also inform, encourage and compensate other agents for their participation insuring that all of their potential buyers will become involved in the auction process as well. A new group of prospective buyers become aware that the property is available and that the listing time is limited to the date of the auction.
• Property Sold “As Is” With No Contingencies: An attractive feature to sellers is that auction contracts have no contingencies and the property typically closes 30 to 45 days following the auction. The property is sold in “as is” condition with no warranties, with the buyer responsible for any inspections. Financing conditions are very rarely part of a real estate auction; potential bidders must register before bidding and are screened for their ability to meet contract requirements.
• Seller Pays No Commission: A buyer’s fee will be added to the final bid price. In auctions, the buyer’s premium is an additional percentage charge on top of the hammer price of the property that must be paid by the purchaser. (Eg. Hammer Price = $100,000 x 10% Buyer’s Premium = $110,000 Final Contract Price)