With limited success, I have spoken to realtors in their weekly sales meeting about the benefits of an auction as a first option and not as a last resort. In my presentation to them, I explain that the traditional method of listing a property is to start at a certain price and then reduce it gradually over the listing period until there is an offer or the listing expires.
With an auction, the auctioneer starts at a price he feels he will get an opening bid and moves up from there. I have never seen a listing price increase over the listing period. It just doesn’t happen.
With an auction, open competitive bidding creates excitement. Auctions eliminate competition and create a sense of urgency. You never hear, “I want to think about it,” as all sales are final on auction day with a schedule closing date of 30 days or less from the day of the auction.
What most realtors who refuse to work with auctioneers do not understand is that all bidders at an auction are potential buyers, particularly the backup bidder. Auctions can increase the realtor’s revenue and market share. In some cases, the realtor can establish a niche market just for auctions.
If the auction is posted on the realtor’s website, it can bring potential bidders to look at all the realtor’s listing and not just the auction. It could generate a list of ready, willing and able qualified buyers.
An auction can be scheduled from 30 to 45 days from the day of signing an auction agreement. How many times has a realtor been asked by the seller, “When do you think the property will sell?” after signing a listing agreement. Can a realtor really say, “In 30 to 45 days?” An auctioneer can.
Auctions offer clients and customers new selling and purchasing options. It assures that the property will be sold at true market value. You might be thinking, “And just what is true market value?”
True market value is established when the last bidder stops bidding. True market value is not what a realtor says the home is worth, it’s not what the brother-in-law says it is worth and it’s not what an appraiser says it is worth, as an appraisal is just an “opinion of value.”
Realtors can earn their normal commissions, or a referral fee. A successful auction can result in referrals and future business for the agent.
Still not convinced about the benefit of an auction to the realtor, give us a call at 252-257-4822.