Real Estate

The National Real Estate Association predicts that in 2009 65% of all real estate sold in the United States will be sold at auction.  The professional auction service virtually eliminates the often lengthy ordeal of selling real estate property.  The seller chooses the actual date and time that their property will be sold.  With the right advertising, interest and urgency is created so that motivated, competitive bidding allows your property to be sold at true market value.  Open houses are scheduled so seller control is maintained, no more last minute viewings.

Real Estate Auction Marketing Advantages……..Seller Benefits

• Quick immediate sale avoids lengthy hassle – auctions take the seller out of the negotiation process
• Accelerates sales – the property can sometimes be sold within weeks of auction listing.
• Eliminates high seller carrying costs – (such as interest, taxes, maintenance)
• Offers the seller another option
• Exposes property to a large number of pre-qualified buyers
• Auctions are an aggressive, advance marketing program that increases potential interest in and awareness of a property.  Advertise directly to your target audience
• Requires that potential buyers pre-qualify for loans
• Property is sold  “as is”, “where is” and “how is” without contingencies
• Creates competition among buyers – auction prices can exceed the price of a negotiated sale.  An Auction generates excitement and heightens buyer interest.
• Auction brings interested buyers to a point of decision – they must act now or lose an opportunity to purchase.
• Auctions create URGENCY to buy- NOW!
• A seller knows exactly when the property will sell
• A seller sets the terms and conditions of the sale, maintains control of the property throughout the auction (depending on auction type), and actively participates in the sale’s process.
• Auctions reduce the time the property is on the market
• Auctions eliminate numerous and unscheduled showings
• Competitive bidding raises selling prices
• Sell for true market value – auctions are a true market forum.
• No Seller Commission fees (this is contingent on value of property..... a buyer's premium is charged, minimum fees do apply)
• Sales are Final
• Seller is able to obtain liquidity
• Seller is able to move on to other investments and free up capital.  See Rule of “72” below.

RULE OF “72”

An important concept in understanding the magic of compound interest is the RULE OF “72”!  Your money will “double” at an exact point by dividing 72 by the % of interest!

72 / 1% interest = 72 years
72 / 3% interest = 24 years
72 / 6% interest = 12 years
72 / 9% interest=    8 years
72 / 12% interest = 6 years
72 / 15% interest = 4 years, 10 months

Real Estate Auction Marketing Advantages……..Buyer Benefits

• Purchase property at fair market value
• Never has to worry about paying too much
• Eliminates long negative haggling negotiation periods
• Reduces time to purchase property
• Gain confidence as they compete
• Do not have to worry about contingencies because purchasing and closing dates are known
• Feel better about a purchase – knows there is a contending bid just one increment under purchase price
• Buyers know property owners are motivated to sell
• Buyers know property owners sell at lowest price possible
• Buyers can receive favorable financing
• Buyers set their own purchase price

FAQ’s

What is a Real Estate Auction?
A Real Estate Auction is a method of buying and selling real estate which simplifies the purchasing process through the medium of an auctioneer.

Why buy at an auction?
Because sellers save the cost of holding their property, buyers in turn can take advantage of this savings.  An auction provides the opportunity for buyers to buy at a price which is established by the purchasers.

Where can I get information on the properties for sale?
The auction sale brochure or flyer will list all the addresses and a general description of the property, as well as the open house schedule.  Additional information, which includes tax and assessment information, lease information, terms of sale, the real estate sales contract and financing terms, are printed in the Bidder’s Information Package available at any open house.

Do I need to register?
Yes, in order to bid at the auction you must register.  To do this, you will be required to show evidence of a cashier’s check, certified check or money order for the required amount, as well as a form of personal identification.  However, you hold on to the check until your bid has been accepted.  (Please make all checks payable to yourself.)

Do I need to bring a broker with me?
It is not necessary to bring a broker to represent you, but you may if you wish.

How do I bid?
After registering at the auction, you will receive a numbered bidder’s card.  This card should be visable while you are bidding, or our auctioneer and staff may not take your bid.  Our Bid Assistants watch for bidders and will call in your bid when you tell them to do so.

Is there a starting bid?
The auctioneer invites an opening bid for each property at a price level low enough to stimulate competitive bidding while high enough to speed the sale along. 

How will I know if my bid is accepted or rejected?
The seller will accept or reject the bid on the spot.  High bids in absolute sales are accepted automatically regardless of price.

Will I be able to understand the auctioneer?
Yes.  Our auctioneers call the bids in a very easy to understand manner.  Plus, our Bid Assistants will assist you when you bid by getting the auctioneer’s attention if needed.  Work with your Bid Assistant.

What if I am out of town on the day of the Real Estate Auction?
If you will not be attending the auction and would like someone to bid in your place, they must be authorized to represent you by having a power of attorney document, and meet all other registration requirements.

How do I know which properties are being sold absolute?
The properties sold absolute are listed as absolute sales in the auction brochure.  They usually are the first properties to be auctioned.

How are the properties chosen to be sold absolute?
The seller most often chooses the absolutes as a representative sampling of the properties being sold.

When can I see the property?
Open houses are held beginning approximately four - two weeks prior to the auction date.  During the open houses, prospective bidders are encouraged to verify the description, number of rooms, square footage and property dimensions.

In what condition is the property?
All properties will differ as to their condition, and are sold in “as is – where is” condition without warranty or guarantee of any kind (other than clear title).  Bidders are strongly encouraged to inspect the property prior to the sale.

Who can I contact to see the property if I miss the open houses?
Our auction representative may be able to set up a special showing for you, but because this is not guaranteed, we strongly urge you to attend a scheduled open house.

How many properties can I buy?
You may purchase as many properties as you wish, but you must have a separate cashier’s, certified check or money order for each one.  For investor’s, financing may be limited to a certain number of purchases.  Consult Bidder’s Information Package for specific terms.

Why is the property being auctioned?
The real estate auction provides an expeditious means for banks and owners to sell many properties in one or two days, saving thousands of dollars in holding costs.

Are there any liens, back taxes or delinquent assessments on the properties being auctioned?
All properties sold will be guaranteed to be free and clear of liens by the Title Insurance Policy.  Unpaid taxes and other proratable items will be prorated to the time of closing.

In what form is the earnest money deposit required?
Prospective buyers must bring a cashier’s check, certified check or money order in order to bid.  If you are the successful high bidder, this money will then be considered all or part of the earnest money deposit and is not refundable. NO PERSONAL CHECKS, PLEASE.

Is additional earnest money deposit required?
Specific requirements for “additional earnest money deposits” vary for each auction.  Please consult the Bidder’s Information Package for details.

How do I get financing?
A local loan company usually provides financing to qualified bidders.  Buyers are encouraged to pre-qualify for this by contacting the loan company.  Names and numbers of the appropriate companies and their personnel are given in the auction literature.  As an alternative, buyers can obtain their own financing, or pay with cash.

How soon must I begin financing procedures?
If you intend to use the auction loan company, you generally must apply for this within 5 business days of the auction.  In addition, you must be ready to close within 45 days of the auction.

What happens to my earnest money if I decide at a later date not to buy the property?
Your earnest money deposit will be forfeited if you fail to consummate the sale regardless of the reason.  If the seller fails to close because of defective title, etc…..your deposits will be refunded immediately. 

What is the difference between Market Price, Estimated Market Value and True Market Value?
Market Price is the price someone is asking for a property when put up for sale.
Estimated Market Value is the value set by the County Assessor where the property is located.