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REAL ESTATE AUCTIONS: THE BASICS & BENEFITS November 1, 2006

Posted by AlynnROCK Group in Auction FAQ, Auction News, Real Estate News.
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realtor_benefits.gifLet’s take a look at the National Association of Realtors and what they have to say about Real Estate Auctions. I know that there are quite a few Realtors out there who might be, at best, confused…at worst, skeptical & closed-minded. Let’s see what the NAR has to say…..(I just found this article by going to their website and typing “auction” into the search bar…there’s lots of good advice for buyers, sellers, and Realtors on the NAR website!)

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Q. What is a Real Estate Auction?

A. A real estate auction is an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property — most certainly including those that are nondistressed — through open cry, competitive bidding.

Q. How will auction benefit me?

A. The real estate auction is a win-win proposition for everyone involved.

BENEFITS TO THE SELLER:

* Buyers come prepared to buy
* Quick disposal reduces long-term carrying costs, including taxes & maintenance
* Assurance that property will be sold at true market value
* Exposes the property to a large number of pre-qualified prospects
* Accelerates the sale
* Creates competition among buyers – auction price can exceed the price of a negotiated sale
* Requires potential buyers to pre-qualify for financing
* The seller knows exactly when the property will sell
* Eliminates numerous and unscheduled showings
* Takes the seller out of the negotiation process
* Ensures an aggressive marketing program that increases interest and visibility

BENEFITS TO THE BUYER:

* Smart investments are made as properties are usually purchased at fair market value through competitive bidding
* The buyer knows the seller is committed to sell
* In multi-property auctions the buyer sees many offerings in the same place at the same time
* Buyers determine the purchase price
* Auctions eliminate long negotiation periods
* Auctions reduce time to purchase property
* Purchasing and closing dates are known
* Buyers know they are competing fairly and on the same terms as all other buyers
* Buyers receive comprehensive information on property via due diligence packet

BENEFITS TO THE REALTOR®:

* Generates a list of ready, qualified buyers
* Offers clients and customers new selling and purchasing options
* Increases revenue and market share
* Develops your own market niche
* Assurance that property will be sold at true market value
* Property is sold within a relatively short period of time
* Exposes the property to many potential purchasers
* Auctions bring people in to look at all your listings, not just the auction listing
* Successful auctions result in referrals and return business
* Agents can earn commissions as referring agent/broker, cooperating agent/broker, or as the listing agent/broker

SOURCE: National Association of Realtors

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