When you make the decision to sell by auction, the most important thing you must do is hire a qualified and experienced auctioneer or auction company to handle your auction.  As your representative, the auctioneer is the one who will actually sell your property at auction.   If you’re working with a real estate agent, he or she can help you locate an auctioneer.  If your property is currently listed for sale and you are considering an auction, 

Another important thing to look for is an auctioneer who is a member of the National Auctioneers Association. You’ll likely find the NAA logo on business cards, signs, web sites, etc.  The NAA is the largest professional association for auctioneers in the country, working for the improvement of the auction industry.  It offers education programs for auctioneers to stay up-to-date on the latest trends and technology for the auction industry.  All members of the NAA abide by a code of ethics that guarantees high standards to customers and fair business practices.  In short, this symbol means you have made the best choice when it comes to auction services!

• Ask questions about the written proposal for your auction. Get details on what is involved.
• Find out how the auctioneer earns their commission. 
• Ask to review a copy of their auction agreement. 
• Find out how the sale will be marketed. The success of the sale depends a great deal on the marketing effort behind it.
• Get information on their experience level, properties sold and background.
• What licenses do they hold and/or what training have they completed?
• Ask about setup and cleanup of the auction.
• Request references for past sellers they’ve worked with.

Once you hire an auction company, your auctioneer will work with you to determine what auction format will best for your situation.  The auction type will often vary depending on what is being auctioned. These different formats are applied across different lots being sold. They can be used for real estate, luxury goods, art, livestock, vehicles, businesses, coins, storage units, business assets, etc.  Regardless of the auction type, it is disclosed upfront so that participants and the seller have the same understanding and expectations as to how the auction will be governed.

What are the different types of Real Estate Auctions

Absolute Auction (auction without reserve)

• • The property is sold to the highest bidder, regardless of the price.
  • Since a sale is guaranteed, buyer excitement and participation are heightened.
  • Generates maximum response from the market place.
  • Many sellers, including financial institutions and government agencies have begun to use this method more frequently.

Minimum Bid Auction (english auction)

• • The auctioneer will accept bids at or above a published minimum price. This minimum price is always stated in the brochure and advertisements and is announced at the auction.
  • Reduced risk for seller as the sales price must be above a minimum acceptable level.
  • Buyers know they will be able to buy at or above the minimum.
  • The seller may, however, limit interest in the auction to only those buyers willing to pay the minimum bid price, and therefore it must be low enough to act as an inducement rather than a hindrance.

Reserve Auction (auction subject to confirmation)

• • In this scenario, a minimum bid is not published, and the seller reserves the right to accept or reject the highest bid within a specified time.  Sellers predetermine the price at which the property will be sold and are not obligated to confirm a sale other than at a price that is entirely acceptable to them. 
  • This is one of the least risky auctions for a seller because they can protect themselves from underselling their properties.
  • Reserve auctions are not very exciting to potential buyers, because even if they have the highest bid, the seller may reject it anyway. These types of auctions become very anti-climactic when sellers decide not to sell.

Sealed Bid (Blind Auction)

• • In these auctions, buyers submit their best offer in a sealed envelope. The bidders have no idea how much anyone else has bid. The auctioneer opens the envelopes in private and the results are only shared privately with the seller.
  • Properties that don’t have spectacular curb appeal tend to sit on the market for extended periods of time or get very low offers which reduces the perception of the properties value.
  • At this point the seller must decide to either: accept the highest bid, reject all bids, or call for “highest and best” from only the two highest bidders.
  • This type of auction is most commonly used for commercial, industrial and vacant land properties. 

Combo Auction (Two Step Auction)

• • It is a combination of a sealed auction and an Absolute, Minimum, or a reverse auction. First sealed bids are gathered. The seller reviews the bids and if no offer is accepted, they invite the top five bidders into live bidding. Now the five bidders participate in an absolute, minimum or reserve style auction.
  • This type of auction is most commonly used for commercial, industrial and vacant land properties. 

Some auctions are held on site at the property where buyers gather in person to submit bids.  Another type gaining in popularity is timed online auctions. These auctions are held exclusively online and allow a specified timeframe (usually 2-4 days) in which buyers can watch and submit bids..  Some auctioneers combine two or more methods to maximize their pool of prospective buyers.

Another item to consult with your auctioneer on is whether or not you are going to accept bids/offers prior to the auction, setting a “buy it now” price and other strategies designed to capture any and all buyer interest to make sure our clients are getting the best possible outcome. 

Find out how potential buyers will be pre-qualified, whether that’s by requiring a pre-approval letter from a lender, or proof of funds from a financial institution.   

In some situations, a check or credit card deposit will be required prior to the auction in order for buyers to be officially registered to bid.  In that scenario, the money will be returned if they don’t end up winning the auction.

A strategic marketing campaign can be the difference between a successful auction and one that is too quiet to drive prices higher. There are  of ways to promote an auction effectively,  Making it essential to partner with an auction company with an understanding of how to get in front of your target audience.

We create an information package for your property, then have it professionally designed complete with top quality photographs, aerial shots, floor plans, tax records, utility and zoning information, inspection reports, maps, and details about the terms of the auction sale.  Once the property is listed and we begin marketing, we keep you informed every step of the way.

When you work with us, we cover your marketing costs! 

Scheduling an auction at least 3-5 weeks before the auction date gives us sufficient time to raise local, national and even international awareness by using leading edge digital marketing paired with old school marketing along with word of mouth through our extensive network of buyers and professional connections.  If you are in a time crunch, we can still schedule your auction on short notice and do a marketing “blitz” which is a proven strategy to get maximum exposure in a timely manner.

We typically use a combination of the following marketing elements to achieve maximum visibility and buyer interest for your property…

• Professional photography, video commercial,  drone aerials and virtual tours
• Extensive social media campaign (including targeted Facebook ads)
• Digital advertisement campaign with ability to re-target those who previously viewed the listing online
• Broker/agent E-mail blasts, multiple E-mails to our network, email subscribers, and list of buyers
• Internet advertising – full detailed listing on the MLS (StellarMLS.com)
• Attractive listing on all popular websites like Zillow, Realtor.com, Redfin, and thousands of other property portal sites across the globe
• Paid premium listing on LoopNet.com [for commercial and industrial real estate auctions]
• Public relations campaign
• Both local and national newspapers and journals
• Targeted eye-catching ads in relevant magazines and publications
• Direct mail campaign – vibrant post cards, flyers, letters, and more  
• Professionally designed marketing brochure 
• Property information package (buyer’s due diligence package)
• Full management of property viewing times, tours and any inspections prior to the auction.
• Custom signs and banners

Each accelerated marketing plan we employ is specifically tailored to each property.  Please contact us directly to learn more about our auction process and advertising methods.

Prospective buyers are encouraged arrive early to view and inspect the property one last time before bidding starts. This means you should ensure your property is looking its  best and interested parties can see the entire property. This is especially true if the auction is being conducted at your property.  We will have our stunning marketing materials and property information packets ready and on display for buyers to grab upon their arrival.   

Before the auction begins, the terms and conditions along with any rules that relate to that specific auction will be clearly displayed and announced.  After that, the auctioneer will go over the important details about  the property itself and any other notable selling points.

Once bidding starts, the auctioneer will encourage bidders raise their bids as high as possible. With that said, ultimately each bidder decides how much they are prepared to pay and the seller decides whether they’re prepared to sell at that price.  As we often like to say…“A property is truly only worth what buyers are willing to pay for it.”  All bids must be acknowledged by the auctioneer and recorded by the auction staff so there is no confusion or disagreement over things like missed bids, who won the auction, how much the bid was for, etc.  No bids can be accepted once the auctioneer says  “Going ONCE…..Going TWICE………Going THREE times……..SOLD!!!”

Upon the completion of bidding, the winning bidder will be required to promptly sign the purchase and sale agreement.  Closing will take place within 45 days from that point.  With a high percentage closing in 30 days or less.   Don’t forget, auction sales have no contingencies and no inspections, so you can rest assured when the property is sold, you’ll close on-time in accordance with the terms you picked that will be reflected on the purchase and sale contract!