Myth 8 – If I sell my property at auction I will have to give it away.
This is a very common myth and leads to some great discussion regarding market value as well as the different types of real estate auctions.
First let’s talk about market value. There are many ways to talk about the value of something. We have book value, appraised value, replacement value, etc.
My definition of market value is, “Something is worth what someone is willing to pay for it on a given day.”
As a professional auctioneer, it’s my job to market property and bring all potential buyers to the auction event on that given day. In the end, the competitive bidding process will ensure that the buyer who was willing to pay the most is given the opportunity to do so.
If we line up 10 people and ask them the value of the stapler sitting on the desk in front of you, we are going to get ten different answers. At the end of the day, the value of that stapler is whatever buyer number 9 made buyer number 10 bid in order to secure the purchase.
Now let’s talk about the different ways to sell. There are many variations, but the 3 basic ways to sell are;
Absolute: The property sells regardless of price.
Minimum Published Bid: The property sells at or above a published minimum amount.
Undisclosed Reserve: The property sells subject to owner confirmation and the reserve is not known.
There is a lot more we can talk about here, but it is safe to say that when you sell your property at auction, you are not giving it away.