Selling a Home at Auction
Five steps for an efficient real estate auction
By Jennie L. Phipps, FrontDoor.com | Published: 7/10/2008
If handled professionally, a real estate auction can be a fast and effective way to sell your property.
To a homeowner, these can be the most beautiful words in the world, especially in a market like this one where selling property the conventional way is often a prolonged pain in the patootie.
In the last few slow-market years, the real estate auction business has been growing like crazy. In 2007, it made $58.4 billion in revenues, up 39 percent from 2003, according to the National Auctioneers Association.
See a day at a real estate auction in Adrian, Michigan.
Sellers love auctions because they are "fast, efficient and effective," says Joe Wilson, owner of Wilson Auctioneers Inc. in Hot Springs, Ark.
Wilson auctioned off Hot Springs-area businessman Mark Bratton's home and Bratton couldn't be happier. The bottom line was the most persuasive, Bratton says. "I told Mr. Wilson that I wanted $250,000. He told me getting that much would be a no-brainer. In fact, the house actually sold for $275,000. We were just really thrilled."
Some people still associate auction sales with distress, but auction professionals say these days that's absolutely not true. About 11 percent of the time, auctioned homes sell for more than what the seller had previously listed the home for in a conventional sale, says G.T. Bynum, marketing director for Williams & Williams, one of the nation's largest auction companies with operations in all 50 states.
"A marketed auction, handled professionally and efficiently, is better than other method of selling a property," says Pam Rose, whose Pam Rose Auction Co. sells homes in northern Ohio and southern Michigan. "An auction is like the Blue Light Special at Kmart -- everybody wants what you're selling, and they'll fight over it."
Indisputably, auctions are fast and short on aggravation. There are usually very limited opportunities for potential buyers to view the property -- often just a couple of hours before the sale, so the seller isn't inconvenienced by potential buyers trooping through the house for weeks or months. The sale itself is completed in a matter of minutes and closing is within 30 to 45 days.
Condition may affect the price, but sellers don't have to spend a lot on fix-up or paint. Buyers bid at their own risk -- there are no contingencies and no guarantees about the condition of the property. The standard language says it all: Properties are auctioned "as is, where it is" and "in its present condition."
If you're considering auctioning a property, here's how to go about it:
