South Florida Realty and Auction
561-781-2436 lpacel0833.aol.com
AUCTION
A "Definite Plan" for success
The old myth that auction properties sell at "give-away" prices is quickly fading as more and more sellers across the country successfully accomplish their real estate objectives utilizing the auction method of marketing.
The National Association of Realtors estimates over 50 billion dollars in real estate will be sold at auction this year and predicts this trend to continue at an increasing rate into the new millennium.
What is an Auction?
Auction marketing is a proven and precise system of processes specifically designed to:
Why Auctions Work
Auction marketing changes the direction and focus of a sales effort in several important ways:
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Conventional Sale Your property must compete with many properties for buyers Buyers typically consider themselves successful in achieving a price reduction Seller must wait for offers Offers often have contingencies that may hinder the closing and force seller into lengthy negotiations Costs of ownership (taxes, maintenance, insurance, debt service, etc.) continue for an indefinite time period Equity is "tied-up" in property for indefinite time period Showings are numerous and unscheduled. |
Auction Marketing Many buyers must compete to purchase your property
Auction marketing allows the seller to set the terms of the sale and delivers a competitive, highest and best use offer with no contingencies. Auction sellers enjoy a 95%+ closing rate. Seller chooses the exact date costs are eliminated
Seller chooses the exact date equity becomes available for reinvestment. Showings are scheduled and are conducted in such a way as to strengthen buyer commitment to purchasing your property. |
Time Value of Money
The principal of "time value of money" is based on the premise that a dollar today is worth more than a dollar received at a future date. This concept is best illustrated when a winner of the lottery chooses an immediate cash settlement at a discount over the full prize paid out over 20 years. Auction sellers, because the date they receive their proceeds is certain, are able to take into consideration the time value of money as it relates to the sale of their property. When the time value of money and costs of holding property are calculated, very often sellers will find their net proceeds to be greater at auction than other methods of sale.
Types of Auctions
Many sellers considering the auction method have concerns regarding the price their property might bring at auction. A common question is, "Do I have to accept the offer presented at the auction?" The answer depends on the type of auction utilized to sell the property;
Subject to Conformation Auction
– Seller reserves the right to accept or negotiate the offer at all times.Minimum Bid Auction
– Seller reserves the right to accept or negotiate the bid up until it reaches an agreed upon minimum price.Absolute Auction
– Must sell to the highest bidder regardless of price.Open Bid/Public Outcry Auction
– Buyers must present their highest bid within a given time frame. Seller may accept or negotiate the bids at any time during the marketing period. Additionally, bids are subject to public outcry where all bidders must gather to compete for ownership of the property.What types of properties sell successfully at auction?
The type of property and circumstances surrounding the sale are important factors in determining a property’s suitability for auction. The following types of properties have traditionally sold successfully at auction:
Estates:
Estate auctions draw a tremendous amount of interest and typically produce excellent results. The public perceives this type of auction to be the most credible and as a result buyers quickly become committed to the property. Personal property selling in conjunction with the real estate will attract a large crowd, which raises the excitement level for all. Our recommendation regarding estate matters is consider auction first!
Business Liquidations:
Business liquidation auctions are similar to estate auctions in level of credibility and added drawing power of personal property (office equipment, tools, vehicles, inventory, etc.). Proceeds becoming available on a pre-determined date is very often an important objective to a seller liquidating a business.
Large Divisible Parcels:
It is common for large parcels to spend extended periods on the market with little or no activity. By strategically dividing the property into multiple parcels, desirability is substantially increased and by implementing the proper sale order techniques, auction results often exceed the original list price.
Foreclosures:
Properties facing a foreclosure action should immediately be evaluated for auction. Sellers often wait too long in the hopes "something will happen" and end up selling at a substantial discount, or worse yet, losing the property. Auction marketing offers a "definite plan" to sellers facing foreclosure and ensures full equity recovery.
Commercial Properties:
Commercial Properties typically offer a diversity of uses, however, they rarely meet a buyers exact needs without substantial renovations. As a result, offers can be slow in coming and weighted down with contingencies. Auction Marketing takes full advantage of these properties desirable characteristics, creates a sense of urgency and competition among buyers and ensures a highest and best use offer with no contingencies in approximately 30 days.
Subdivision and Condominium closeouts:
When holding costs and the time value of money are considered, a timely sellout at auction of remaining lots or condos often net the seller substantially more dollars than an extended conventional campaign.
Waterfront and Golfcourse homes and homesites:
Properly conducted auctions of these types of properties generally produce strong interest and very good results. In many instances, a surrounding property owner becomes the winning bidder or was instrumental in notifying the buyer of the auction.
Unique or Unusual Properties:
Waiting for the "right" person to buy these types of properties can take an indefinite amount of time while costs of ownership continue to eat into the sellers net proceeds. Presenting these properties at auction leads buyers far enough along the path of commitment to see beyond any perceived negative characteristics and discover the possibilities these properties have to offer.
Relocations:
The financial burden and liability of carrying a vacant property for an extended period can be a cause of distress for many sellers. Auction services would deliver a higher net return to sellers who may consider discounting their property to effect a timely sale.
R.E.O.’s and Trust Properties:
The concept of "time value of money" and holding costs are well understood and powerful motivating forces to professionals in the financial community. Auctions on behalf of lending institutions are well received by the public and generally produce very successful results.
Trophy Properties:
A relatively recent phenomenon, many sellers of premier properties are choosing the auction method. Properly conducted, these auctions become an event not to be missed and attract buyers who bring the resources and determination to win the property.
Should I consider selling my property at Auction?
Call us to discuss your property and help determine if it meets the initial criteria for selling successfully at auction. If so, we should schedule a meeting to thoroughly evaluate the property and your objectives regarding its sale. During the evaluation, we will help you gain a comfortable understanding of the auction process and the steps necessary to ensure successful results. By using a common sense approach, auction results often can be estimated within a reasonable range. Only upon determination by all parties that auction results are likely to meet your objectives will we recommend moving forward to auction. Our goal is for your net proceeds to be greater at auction than other methods of sale.
A "definite plan" is the difference.
Bob Pacelli, President, South Florida Realty and Auction
Licensed Real Estate
Broker/Auctioneer
561-781-2436, Stuart
561-254-3649, West Palm Beach
E-mail:lpacel0833.aol.com