Why Auction?
An Auction saves you time and links you to the buying public!
Whether you are selling real estate or a large quantity of equipment, inventory, furniture or collectibles nothing is as effective as an auction to bring out the buying public.
Worley Auctioneers and Appraisers offers a highly formatted approach to the sale of goods and real estate via the auction method that allows you, as a seller, to sell everything to the highest bidder in a 2 to 4 week time frame.
We offer turnkey on & off-site auction services providing all of the necessary coordination of advertising, setup, site locations, auction execution and removal.
Worley Auctioneers offers a free consultation where one of our representatives will sit down with you and show you what we can do.
Real Estate Auctions
Real Estate Auctions: The Basics and Benefits
What is a real estate auction? A real estate auction is an innovative and
effective method of selling real estate. It's an intense and accelerated real
estate marketing process that involves the public sale of any property and most
certainly including those that are non-distressed - through open cry, competitive bid.
How will an auction benefit me? A real estate auction is a win-win proposition for
everyone involved.
BENEFITS TO SELLER:
Seller pays no commission
Buyers come prepared to buy
Quick disposal reduces long-term carrying costs including taxes and maintenance
Assurance that property will be sold for true market value
Exposes property to a large number of pre-qualified buyers
Creates competition among buyers - auction prices can exceed the price of a negotiated sale
Requires potential buyers to pre-qualify for financing
The seller knows exactly when the property will sell
Eliminates numerous and unscheduled showing
Takes the seller out of the process
Ensures an aggressive marketing program that increases interest and visibility
BENEFITS TO BUYER:
Smart investments are made as properties are usually purchased at fair market value
through competitive bidding
The buyer knows the seller is committed to sell
In multi-property auctions the buyer sees many offerings in the same price at the same time
Buyers determine the purchase price
Auctions eliminate long negotiation periods
Auctions reduce time to purchase property
Purchasing and closing dates are known
Buyers know that they are competing fairly and on the same terms as all other buyers
Buyers are given comprehensive information on property via due diligence packet
BENEFITS TO REALTOR:
Generates a list of ready, qualified buyers
Offers clients and customers new selling and purchasing options
Increases revenue and market value
Develops your own market niche
Assurance that property will be sold at true market value
Property is sold within a relatively short period of time
Exposes the property to many potential purchasers
Auctions bring people in to look at all your listings, not just the auction listing
Agents can earn commissions equal to what they normally earn an a sale or listing
Properties Suitable for Auction
Most properties are saleable by auction. All types of residential property (e.g. town homes,
condominiums, cooperative apartments and single family homes), commercial and industrial property,
vacant land and even boat slips are sold at auction. Not all property, however, is suitable
for auction. If a property will only appear to a narrow market, auction may not
be the most effective marketing method.
An Auction Self-Test: The Two Thirds Rule
One method to determine if auction is the best marketing strategy is the Two Thirds Rule.
This involves analysis of the market, property and seller situation. Generally, if two of the
three parts (market, seller, property) lean towards auction, then auction should be
offered to the seller as a sales option.
MARKET (Buyers):A good auction situation is one in which the market is:
A changing market
A dull market
Not enough of property type (unique, lake front etc.)
An emerging market - new developments could kick-off a sales program, competition can take place
A sellers market where there is a known high demand and a loft of competition
SELLER:A good auction situation is one in which the seller:
Needs immediate cash
Has a partnership or marriage break-up
Is moving out of state
Wants to liquidate an estate
Is retiring
Is an auction minded seller
Has already purchased another house
Knows the auction will bring a fair market price
Has financial problems
PROPERTY:A good auction property is one that:
Has alot of equity
Is unique - there's enough buyer/market interest encourage competition
(unique properties are difficult to appraise)
Is vacant - vacant properties may encourage vandalism
Is difficult to appraise
Types of Auctions
Essentially there are two types of auctions available to you...
ABSOLUTE AUCTION:
The property is sold to the highest bidder, regardless of the price
Since a sale is guaranteed, buyer excitement and participation are heightened
Generates maximum response from the marketplace
Many sellers, including financial institutions and government agencies have
begun to use this method more frequently
NON ABSOLUTE AUCTION:These may include variations of the following...
Minimum Bid Auction:
The auctioneer will accept bids at or above a published minimum price. This minimum
is always stated in the brochure and advertisements and is announced at the auction
Reduced risk for seller as the sale price must be above a minimum acceptable bid
Buyers know they will be able to buy at or above the minimum
The seller may, however, limit interest in the auction to only those buyers willing to pay the
minimum bid price, and therefore it must be low enough to act as an inducement rather than
a hindrance
Reserve Auction (an auction subject to confirmation):
In this scenario, the high bid is reduced, in effect to an offer not a sale. A minimum bid is
not published, and the seller reserves the right to accept or reject the highest bid within a specified time
anywhere from immediately following the auction up to 72 hours after the auction concludes.
Sellers pre-determine the price a which the property will be sold and are not
obligated to confirm a sale other that a price that is entirely acceptable to them The
main disadvantage of a reserve auction is that prospective buyers may not invest the time and expense of due
diligence when there is no certainty they will be able to buy the property even if they are the
highest bidder.
