What are the advantages to the seller in an auction situation?
- Buyers come prepared to buy.
"Lookers" are eliminated because most often bidders must qualify through a deposit of a certified or cashier's check.
- Auction brings interested buyers to a point of decision.
Buyers feel that if all the properties are sold before the auction ends it represents their last chance to purchase a desired property.
- Sellers get maximum exposure for their properties.
The marketing strategy differs from conventional advertising. It is more concentrated, therefore more intense and visible.
- High carrying costs are avoided.
Through auctions, the seller is in control and knows that if properly priced, his property will sell on a certain date which is usually within 45-60 days from the auction listing. By selling quickly, the seller is able to avoid high carrying costs such as insurance, real estate taxes, security and maintenance, and is also able to benefit from the use of the monies to reinvest in other real estate or investment opportunities.
Other Benefits Include:
- Offers the seller another option.
- Creates competition among buyers -- auction price can exceed the price of a negotiated sale. An auction generates excitement and heightens buyer interest.
- Requires that potential buyers prequalify for loans.
- Accelerates sales - the property can sometimes be sold withing 6 weeks of listing.
- Auction is a true market form - the highest buyer pays the lowest price a seller will accept.
- A seller knows exactly when the property will sell.
- A seller sets the terms and conditions of the sale, maintains control of the property throughout the auction (depending on auction type), and actively participates in the sale process.
- Auction reduces the time the property is on the market.
- Auction eliminates numerous and unscheduled showings.
- Auction takes the seller out of the negotiation process.
- Auction is an aggressive marketing program that increases potential in and awareness of a property.
- Seller is able to obtain liquidity.