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QUESTION: I'd rather list my house first with a Realtor. If I am not
successful in selling it, then I will consider an auction later. Is that the best strategy?
ANSWER:
Auctions are generally viewed as a marketing alternative to liquidating
property in a fire sale effort. An example would be the owner who uses the
auction method after exhausting efforts over a long period of time of
attempting to sell the property privately, also known as private treaty.
To create a scenario for comparison, consider attempting to sell a beautiful
automobile by placing it on the corner of a highly traveled street with
a "for sale" sign in the window. After a period of time of being
exposed to the market place at a certain sales price, the seller reduces the
price to attempt to create additional interest unsuccessfully. After an even
longer period of time, the seller reduces the sales price further thereby
creating an image within the market that surely there is something wrong with
the car or it would have sold at this point and most certainly it could not be
worth the original asking price. We all have seen this same type of marketing
effort occur time after time in the real estate field. After a certain period
of time of unsuccessfully being marketed, the value of specific pieces of real
estate drops substantially. The value drops because the attitude of the market
toward that piece of property has changed.
Although it is not ideal to auction every piece of real estate, sellers should
analyze their particular posture by discussing their needs with a full service
real estate firm that offers both the auction and the private treaty services.
Discuss with a Realtor whether you want actual market value for the property or
a specific sales price. Market value will be attained through the auction
procedure and the property will be sold at a certain date. If the seller
wishes to attain a certain price for the property and is willing to risk
overpricing or underpricing the property, then the seller should consider
the private treaty alternative instead.
QUESTION: Are there better times of the year to sell certain properties at auction?
ANSWER:
You will find some real estate auctions across the country are structured to
take place at a certain period of time during the year because "that's
the way it has always been done." Some auction houses do adhere to the
statement, "If it ain't broke, don't fix it," and do not look for
ways to break tradition, while others will pioneer an area worthy of
consideration.
One example is, "You don't sell farm land until the crop is out,"
allowing clients only a few months within the coldest and most dismal part of
the year to sell one of their most precious possessions. Why not consider
structuring a marketing campaign at the optimum time of the harvest season
when the land can boast of its bountiful crop? Selling the land in the summer
and:
1. Closing the sale a few months later, or
2. Closing the sale, then giving possession a few months later, would be a
more attractive procedure for everyone.
Other examples are selling farm equipment "in the dead of winter
only," selling resort property "in the spring and summer
only," and many more philosophies far too numerous to mention. From
personal experience, some of the very best farm equipment sales and land
auctions I have ever conducted were in the summer.
If you have real estate for sale, don't let tradition strictly guide you.
Rain or shine, a properly conducted auction will attain true market value for
you every time. |
