The Advantages to the Auction Method of Marketing
The advantages of using the auction method of marketing or competitive bidding process for residential property, multi-parcel real estate, commercial property, hunting or recreation property, agricultural real estate, farm land; business liquidations, foreclosure’s and REO’s and other assets at auction includes: allowing the seller to set a date and time for completing the sale, avoids lengthy negotiations, creates a sense of urgency, custom marketing and advertising, establishes market-value real-time, buyers are pre-qualified and the auction environment creates a competitive environment.
· The seller gets to determine the date and time at which the property will be sold. Using the auction method, property can typically be marketed and sold within a four to six week time frame.
· A timely auction allows the seller to drastically reduce holding costs such as interest, taxes, insurance and maintenance.
· An auction environment arouses the competitive spirit among the prospective bidders.
· Setting a specific date and time for an auction creates a sense of urgency and forces the prospective buyers to a point of decision.
· An auction drives people to the property, anyone looking for comparable property during the marketing period will look at properties at auction.
· The seller can set the terms of the auction, like forbearance of a financing contingency, thereby avoiding lengthy negotiations of price and terms.
· An advertising program is tailored to the seller’s property which will attract the largest number of potential buyers. This insures a true “market value” price for the property on the day of the auction.
· There is no ceiling price set on the property, which allows the price to increase freely with no limit.
· Historically, when the market is on the upswing, public auctions have established the highest prices. When the market is declining, an auction will capture the current market price before values drop.
· The competitive bidding format creates confidence among the buyers when they see other people willing to pay a similar amount for the property.