The Auction Advantage
The public auction process is now the fastest growing method of selling real estate in the United States. At 1 Stop, we know that the auction method has the ability to get you top dollar. Our goal is to create a positive auction experience for sellers and buyers!
- Buyers come prepared to buy.
- The auction creates maximum exposure for the property. Auctions are a concentrated effort, so the exposure and efforts are more intense and visible.
- The seller has full control of the sale date, selling terms, and closing date.
- Auctions create excitement and increase buyer competition for property. Competitive public bidding means higher prices!
- Everyone near and far has an equal opportunity to buy your property.
- Buyers know the seller is committed to sell.
- The buyer knows they are getting the property at a fair market price set by public bidding.
- The buyer has full control of what he wants to bid to own the property.
- Auctions reduce the potential negotiating time for the buyer.
- Service – we will work closely with buyers to provide detailed accurate information.
Auction Formats for Real Estate
The real estate sells to the high bidder. The seller does not reserve the right to decline the final bid received by the auctioneer. Absolute auctions generate maximum buyer response. However, it is important to recognize the market risk potential for the seller.
Auction With Reserve
The seller reserves the right to accept or decline the final bid. Auctions with reservation may or may not have an advertised minimum bid. The advantage to the seller is that he or she is not obliged to accept any price other than what he or she and the auctioneer have established as a reserve price for the property. The drawback is that some buyers may not want to invest the money and time in researching a property sale that is subject to seller approval of the final bid.
1 Stop Realty, Inc. is one of the pioneers in offering farms at public auctions using a multi-tract system. Offering property under the multi-tract or round systems will increase the number of buyers who can afford to purchase; creating excitement and demand. It gives all bidders an equal chance to compete and it often results in higher revenues for the seller.
Minimum Bid Auction
Bids are accepted at or above the disclosed advertised minimum. The advantage to the seller is that it does creates a safety net that does not exist in the absolute auction. At the same time, if the minimum bid is set at the proper level, considerable buyer excitement can enter the marketplace. The disadvantage is the seller may be limited to only those buyers interested at the disclosed minimum bid. The minimum bid auction format has been very successful in the marketing of real estate previously listed through traditional sales methods.
The Auction Process
Once the decision has been made regarding the method to use, the 1 Stop team begins preparing for the auction day.
An agressive marketing program is critical to an auction’s success. Massive interest must be created in the property. The advertising budget is set according to specific properties and the type of market that needs to be reached. The budget is then broken down into various forms of advertising that will best reach the market for the individual property. Direct mail, newspapers, trade journals, radio, property signs, telephone solicitation, property brochures, and multiple websites. The auction staff will devote many days of prospecting the market to identify potential buyers and discuss their interest in the property to be offered.
Our goal is to make all potential bidders aware of the sale and provide them with the pertinent information needed to attend the auction prepared to buy without reservations.
The allowed time for a real estate auction varies depending on the type of property, but generally it is 60 to 90 days from the initial planning stage to closing. The auction itself may take from just a few minutes for single property to several hours for a multi-parcel auction.
Terms of an Auction
The seller sets the terms and conditions of the auction with advice of the auctioneer. The terms must be in balance…keeping in mind that there are two parties in the transaction. There should be no contingency clauses on auction day. All possible concerns and questions of the buyers should have been addressed prior to the sale day. Usual terms are the high bidder(s) deposits with the auctioneer an advertised earnest money deposit (% of the purchase price) and enters into a pre-approved contract immediately following the auction. The balance is paid in 30-60 days with delivery of good title from the seller.