Auctions Help Realtors Move Property in Today’s Real Estate Market
WASHINGTON, D.C. - May 15 2008 - In the past, real estate auctions have been used to sell off distressed or foreclosed properties that didn’t sell using traditional methods. Today, auctions are growing in popularity as an effective way to market and sell all types of properties, from residential and upscale homes to land and commercial buildings.
Realtors(R) shared ways to blend auction services into core residential real estate businesses during the Auction Forum today at the National Association of Realtors(R) Midyear Legislative Meetings & Trade Expo.
“Realtors(R) add value to the real estate transaction - they are experts at managing complex home buying and selling transactions, and auctions are no exception,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “Successful auctions require that buyers be well-informed about the auction process and home they will be bidding on. Realtors(R) can help buyers navigate this complex process.”
The real estate auction market rose 5.3 percent in 2007, generating $58.4 billion in revenues. That’s up 39 percent from 2003, according to the National Auctioneers Association.
“Auctions offer clients an opportunity that differs from conventional transactions,” said Realtor(R) Lynn Gardner, 2008 chair of the NAR Auction Forum. “There are many benefits to home auctions - an auction creates urgency, which helps draw attention to the property, market value is determined quickly, homes typically sell faster and close within 30 days, and there are no contingencies or holding costs.”
Listing agents who are interested in introducing the auction method to their clients should first identify an auctioneer or auction company and develop a relationship. “The listing agent, auction specialist and client can all work together, to everyone’s benefit to get the home sold as quickly as possible, and for the best price,” said Gardner.
Realtor(R) Tag Craig, 2008 vice-chair of the NAR Auction Forum, explained that whether an auction is conducted online, on the steps of the property, or “ballroom style” with multiple other properties, the process is often the same.
“Sellers, their listing agents and auction specialists will work together to determine the home’s market value, the auction type and how the auction will marketed. Homes are commonly marketed for four to six weeks before the auction through print ads, online, e-mail notifications, press releases, information packets and neighborhood signs,” said Craig.
According to Gardner, buyers are invited to attend open houses and inspect the home before the auction begins. Homes are sold in “As Is” condition however known defects must be disclosed. The auction can be absolute, in which the property is sold to the highest bidder regardless of the amount, or a minimum or reserve price may be set to begin the auction. Depending on the type of auction, the bidding will end after a set time limit or when the reserve price is met or exceeded. Sellers usually have the right to refuse any unacceptable bid.
Earlier this week, Realtors(R) were able to attend the “Introduction to Real Estate Auction” course, a new course offered by the Real Estate Buyer’s Agent Council, an NAR affiliate that focuses specifically on the real estate buyer. The course helps Realtors(R) understand and utilize the auction method of marketing and identify properties and sellers that are good candidates for real estate auctions. It also provides guidance on establishing alliances with auction companies or setting up an auction division within your company.
The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.realtor.org. News releases are posted in the Web site’s “News Media” section in the NAR Media Center.
REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.
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