Q2 Mortgage Filings Down 31%
May Commercial Sales Drop 75 Percent
Sales Drop 50% Despite Builders’ Best Efforts
January Home Sales
Real Estate Auctions Thrive
2007 New Home Sales
Schnuck's pay $3M for property
Company to auction 100 foreclosed Memphis homes
Auctions gather steam as first option for home sellers
NAR Report: New-home sales recovery unlikely before 2009
Message is Clear: Buy Houses Now (from The Daily News)
New Kid on Block
Auction industry experiences extensive growth for 2006
Charity Auction Raises $83,000
Auction Advantages
By 2010, 30 percent of all real estate transactions will be auctions according to the National Association of Realtors (NAR).
The reason is that auctioning maximizes net value to the seller - especially as professionals like those at Morris Group Auctions have turned auctioning into the most technologically and strategically advanced method of selling real estate.
Auctions VS. Traditional Sales:
Speed of the Process - Number 1 reason
Once you agree to proceed with an absolute auction, your property will be sold in six to eight weeks, instead of the six to
eighteen months and longer typical of other selling methods. You not only save holding costs, but quickly get your money back into productive investment. You can also confidently plan and make commitments in the knowledge that your property will be sold for the highest
market price available on a certain date. Reserve auctions with realistic minimums
can deliver the same benefit.
Unlimited Ceiling
The most important element of the auction process is Competitive Bidding. An auction brings buyers
together at one time and place to compete with each other for the high bid.
Since everyone in attendance knows that the property will be sold, the competition
is created and creates a sense of urgency that can not be created by any other
selling method.
No Buyer/Seller Negotiation
Other selling methods put the buyer in control of the process, starting with an asking price and negotiating down, under no time pressure to close. The only competition is between sellers.
The auction method is the exact opposite - it amounts to a negotiation between buyers, starting with an opening bid and negotiating up.
No Contingencies
All of our auction properties are sold in “as is, where is” condition. Potential buyers are given ample time to inspect properties prior to auction. Terms and conditions are preset and non-negotiable.
Pre-Qualified Buyers
In order to bid, potential buyers must present a cashier's check, usually for
five to ten percent of the anticipated sales price, before the auction opens. The high bidder simply endorses that check over as part of the 10% down payment required when the auction concludes. Pre-prepared contracts are signed then and
there. The closing date usually occurs within 30 days.
TYPES OF AUCTIONS
As a Seller, you have a choice to make in the way that the property is sold; either Absolute or the Reserve auction method. As a general rule the Absolute Method of auctioning will generate a much greater interest among potential buyers. Buyers have a natural tendency for paying more attention to the Absolute Auctions than the Reserve Auctions. They feel that since the property will absolutely sell at the auction, then they will invest their time and attention to the ones that they are certain will sell. The result is a greater attendance at the auction and more competition during the bidding. The higher level of competition during the bidding will cause the property to realize its full market value.
The word Auction creates a sense of urgency and cause people to react and
the phrase “Absolute Auction” ensures that no interested buyer will
miss the auction.
With a Reserve auction you establish a confidential reserve price and have
the right to accept or decline the highest bid if it falls below the
established reserve. If the Reserve Auction method is chosen, it is
important that the reserve be very realistic. One thing is certain; the
auction will produce the highest price that the market is willing to pay for
the property.
Absolute Auction
An Absolute Auction means exactly what its
name implies; the property will sell regardless of the amount bid.
While on the front end this seems scary to many new sellers at auction, old
pros will tell you that this is always the best way to ensure the highest
price to be achieved. Think of it as a buyer - would you spend your
time and effort to investigate a property if you were unsure that it will
sell? Maybe, but maybe a little less likely. Any interested
buyer will not miss an absolute auction.
Published
Minimum Bid
The next best method to generate motivated bidders is use a
Published Minimum Bid. This lets the market know that you are
serious about selling. The amount that is used for a Published
Minimum Bid is typically 60% of the last listed price or appraisal
for residential properties. While this number seems low and is
below what you would like to actually receive, it lets the market
know that the property WILL sell because everyone knows that the
real value is higher than the published minimum. Therefore, the
bidders will come and the competition will drive the price up to a
more reasonable number for you.
Reserve Auction
A Reserve Auction allows the seller to set a base
price that he will not accept. While no matter what the bid is they
Seller may accept it and will usually not turn down a reasonable bid.
Reserve Auctions are usually applicable when there is little equity in the
property.
Please
let us sit down with you and one of our associates will help guide you
through the process
of picking which auction type is best suited for your
property! Contact Us Today!