In years past, most real estate owners associated auction sales, in general, with estate sales. When people died, their assets would be auctioned to settle their estates, personal property would be sold at auction. Auction of real estate, on the other hand, would be linked with distressful situations, such as foreclosures and bankruptcies, where the law often dictates the method of sale.

 

     More and more real estate owners are realizing that there are many good reasons why they should consider auctioning their real estate when they are ready to sell. People are learning the auction method is an alternative way of selling their real estate that potentially can maximize their cash recovery. They are realizing that a negative stigma will not necessarily be attached to them or their real estate if they decide to auction it.

 

     Today, the entire picture has changed. Auctions are now seen as a viable alternative to selling almost anything. More and more real estate owners are going directly to the auctioneers and asking them to sell their real estate without any family deaths motivating them or financial distress. They see the auction method for what it really is: a highly successful and potentially profitable way of selling real estate.

 

     The auction method nets the seller more for several reasons: limited time frame, no ceiling prices, competitive selling environment, and lower settlement expenses. No single reason makes auction sales preferable to privately negotiated sales, but when put together, they can make the difference between a fair sales price and an excellent sales price.

 

     Auctions of real estate are held at a specific time, date, and place usually on the premises. Most real estate will be auctioned within four to six weeks after the contract with the auctioneer has been signed.

 

     This specific time frame is effective in two ways. First, it reduces the real estate owner’s waiting period for a buyer because bids can only be made at the sale. Second, this time frame puts a deadline on the buyer’s interest. The buyers know they have only one opportunity to bid on the real estate, and if they do not, they will loose the chance to purchase the real estate. This limited market period, therefore, stimulates a buying frenzy which contributes to a competitive auction sale.

 

     Potential buyers need to be informed of the auction. When a real estate owner signs a contract with a professional auction firm, he is hiring an auction team that will design and implement a marketing/advertising program that will draw people to the auction.

 

     This marketing program is specifically designed around the particular property and geared towards all the potential buyers. Ads are designed and placed in the newspapers and journals. An auction sign is placed on the property. The auction firm then handles all the phone calls and other interest generated about the property. All tours of the property and inspection information are also handled by the auction firm. A good marketing program will attract a large pool of prospective buyers who would not have been aware of the sale otherwise.