Is Selling By Auction The Way To Go?

 

Selling by auction has advantages and disadvantages. When selling by auction, the terms of the sale are usually more rigid than when selling on the open market. Terms such as inspections, mortgage and other contingencies are typically excluded from the Agreement of Sale. From a selling standpoint, this can be advantageous, especially in cases of estates where the ultimate goal is to settle everything as quickly as possible.

On the other hand, the effect of limited terms is usually reflected in the ultimate selling price. Often times, properties sold by auction sell for about 80% of the price expected when marketed by a Realtor on the open market. In addition, Multi-List services are not available.

The biggest disadvantage to an auction is the exclusion of Realtors from the buying process. Many buyers work with a Realtor in order to have representation during the buying process. Many times these buyers have a Business Relationship with a Realtor. 

Many auctioneers will not work with, or refuse to pay a co-op fee to Realtors. As a result, buyers working with these Realtors will not attend or participate in the auction, which could result in a lower bid price received.

Contact Steve to ask about his unique ability to blend the auction and open market concept to reap the benefits of both processes. He has formed alliances with an auctioneer that allows for Realtor participation in the auction process. By doing so, you can receive a "hassle free" auction while opening the bidding to all prospective buyers and encouraging Realtors to bring their buyers to the sale.