QUESTION:
Do I understand correctly that with real estate auctions, the sellers must put money up front to cover advertising expenses?

ANSWER:
Every auction company has its own policy about advertising expenses. The optimum way for the seller is for the auction company to determine the amount of money necessary to promote the subject property to the market place properly and have the seller pay this amount up front when the contract is signed. The auction company should suggest an amount that will cover all newspaper advertisements, auction signs, brochure printing and mailing, and any other media costs such as radio and television. The advertising campaign is conducted to make the market aware of the sale. While the advertising expenses should be carefully spent, the outcome of the project is the only point on which the auction company should be focused.

There are some auction companies that may pay the advertising expenses; but, as the old saying goes, "You get what you pay for." Why tempt the auction company to cut corners to save on the commission? There are several important aspects of a properly conducted auction; one of them is to saturate the market with the best possible promotion to reduce the risk of any potential bidder not knowing about the sale. A properly conducted auction turns the attention of the market toward the subject property. Promoting an auction is not the time to be cutting corners.