Busting Auction Myths About Selling Real Estate
With the National Auctioneers Association Conference and Show happening this week in Columbus, Ohio, it seemed fitting to address some perceived myths about auctioning real estate.
In many locations across the United States, home auctions are becoming more common and frequent. In fact, their popularity has inspired some traditional real estate broker companies to open auction divisions. In addition, more and more real estate salespersons are attending auction schools, learning about how to sell in a new way. Using an auction is becoming one of the top options for both sellers and buyers. Regardless, there are still some popular misconceptions about real estate auctions. Today’s article takes a closer look at some of these auction myths, and will give you the real information.
Despite many national media outlets reporting that housing has recovered, many real estate markets across America are still slow. Auctions are considered a nontraditional method for selling a home. Nevertheless, it is attractive because it can bring certainty. When an auction company starts marketing a property, potential home buyers know you have chosen how to sell, and you know exactly when your house will sell. You don’t have to deal with open house events or people walking through, but never making an offer. When the bidder shows up, they have already done their research and they are there ready to bid. Still, there are many false impressions about home auctions, and here are a few.
Real Estate Auction Myths
- Auctions are only for homes in foreclosure or in poor condition. – It is certainly true that auctions have developed a reputation because they are the method used for foreclosures and distressed properties. However, you can also find luxury and vacation homes, commercial properties, recreational, land, and farms as well as those homeowners looking for a fast sale.
- You can’t get the price you want for your house. – A home auction places the bidder in a position of competing for a home they want. This competition will reveal a property’s true market value. Moreover, as the seller working with a savvy auction company, you can set an achievable reserve price, which is a minimum amount you will accept for your home. Finally, unlike making a traditional offer, bidders know the highest bid instead of wondering. Sellers also love the no contingency contracts and the absence of back and forth negotiations.
- When sold at an auction, buyers can’t inspect properties. – Under certain conditions, like a sheriff’s sale or a judicial auction, this is true. Otherwise, a prospective bidder can schedule to have the house inspected. Most properties can be inspected just like a home using a more traditional home sale process. However the inspections are done prior to the bidding the the buyer is aware they are purchasing the property under it’s current condition and not subject to future inspections and repairs.
- Auctioning is a complicated process. – Many perceive auctions as complicated simply because they are unfamiliar with the option. Unlike traditional home sales, auctions are focused on simplicity and transparency. The auction process removes uncertainty that home buyers and sellers often face when using traditional home sales.
- Home auctions require cash only, paid in full. – Very often, a buyer only needs 10 to 20 percent of the purchase price as earnest money at the time of the auction. This portion must be in cash or certified funds. The buyer must also have pre-approval for their financing. But, unless it is a county or judicial sale, you will likely have 30 to 45 days to close before forfeiting the property and their earnest money.
- The fees for auctions are expensive. – Most of the cost for a home auction is associated with the accelerated marketing of the property. It is this mass marketing that makes home auctions so successful. So, while the costs may be slightly higher than traditional home sales, the seller is receiving rapid results and saving the costs of carrying and maintaining the property.
- A real estate agent is never involved with an auction. – This is simply untrue. Real estate brokers and agents are often involved in referring clients, generating interest, or acting as a listing agent. In fact, there are many benefits for agents who want to be involved with home auctions. Kaufman Realty & Auctions offers buyer’s agents the opportunity to represent their clients at auction and also works with seller’s agents who prefer using the auction method of marketing.
If you have any questions regarding real estate at auction and auction myths contact our office to speak to a #NAAPro #AuctionsWork.
Do you have real estate that you’d like to sell? At Kaufman Realty & Auction LLC, we specialize in selling real estate at auctions. Since 1975, we’ve been conducting successful real estate and personal property/content auctions in Ohio, West Virginia , Western Pennsylvania, and throughout the country as members of the MarkNet Alliance. Please contact us and learn more about how we can help you get the best price possible for your properties.