August 1, 2011
Myth 7 – I Won’t Know If I am The Winning Bidder on Auction Day.
Typically the results of an auction are known on the day of the auction. In some cases there might need to be confirmation from the seller who is not available at the time of the auction. In this case a professional auction company will disclose to the bidders that notification of acceptance will be given within a specific time period.
If the property is being sold at absolute auction then the high bidder will know that they are the winning bidder immediately.
An absolute auction is an auction where property is sold to the highest bidder regardless price. With an absolute auction there is no minimum or reserve price, so there is no need for the seller to confirm the winning bid. Not all real estate auctions are absolute, so it is important to understand the terms and conditions of the auction.
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Posted by robmayo
July 4, 2011
Myth 6 – An Auctioneer needs to be a licensed real estate agent to sell real estate at auction.
This is one myth that is quite an eye opener. In the State of Kansas, a real estate license is required to conduct a real estate auction. In the State of Missouri, all you need is $52 and a pulse to be a licensed auctioneer and be able to offer real estate at auction.
Other State laws vary, and in fact some States have very strict laws and guidelines, while others do not. It is important to know this if you are interviewing a real estate auction company.
Following are a few questions that you should ask in regards to licensing and professional standards when speaking with a real estate auction company.
1. Are you a licensed broker or agent? If you are an agent, who holds your license?
2. Are you a member of the local real estate board?
3. Are you a member of the local MLS?
4. Do you post your auctions on the MLS?
5. Are you required to attend continuing education courses in real estate to keep your license active?
A professional real estate auctioneer will be able to answer all of these questions properly.
It is important to know who you are doing business with.
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Posted by robmayo
June 22, 2011
Myth 5 – The auction company places people in the crowd to bid for the seller.
This is one of my biggest pet peeves. It is called shill bidding and it is WRONG!
There is no need for this type of activity, and a reputable auction company will not plant bidders in the audience.
It is important to read the terms and conditions of the real estate auction to understand what type of bidding is allowed. If a property is being sold ‘subject to owner confirmation,’ and it is disclosed that the auction company can bid on behalf of the seller up to the reserve amount, then this is perfectly legal and acceptable. The key is full disclosure. In this case bidders know who they are bidding against and can make an informed decision as to whether or not they want to increase their own bid.
If the property is being sold without reserve, or absolute, there is no allowance for the auction company to bid on behalf of the seller. This is the purest form of an auction.
Sometimes there is phone bidding, online bidding or absentee bidding at a real estate auction. These bids will be handled by a staff member and it will be known that these are qualified buyers who have filled out the necessary paperwork and made the necessary deposit prior to auction day.
If you do business with a professional real estate auction company, there will be no shill bidding. It is important to examine a company and understand their ethical practices.
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Posted by robmayo
June 21, 2011
Myth 4 – The only reason people have an auction is because someone died or the seller is in financial distress.
There are a number of reasons why people choose to have a real estate auction. in fact some of the most common reasons have little to do with the sellers financial situation or the settlement of an estate.
Some of the most common benefits include:
1. Negotiations eliminated – Because price is determined with competitive bidding, there is no back and forth negotiating that can sometimes lead to a property not selling after considerable time has been invested.
2. Increased property exposure – Auctions require an aggressive approach to marketing because of a defined time of sale. A professional real estate auction company will be masters of marketing, to ensure a successful event.
3. Accelerated and time defined sale – Sellers love to know when their property will sell. With an auction, the date is set and the marketing begins. Marketing is usually done in 30 days with another 30 days to close. Knowing when your property will sell and close gives you an advantage when making important financial decisions.
4. No contingencies – The auction method of marketing allows to the seller to sell the property in it’s current condition, with full sellers disclosure. This allows for buyers to adjust their price in accordance with any repairs or work that needs to be done, while giving the seller the benefits of a guaranteed sale without contingency upon repairs or financing. All of the due diligence is done prior to auction day.
Time has become a valuable resource in our current society. This has created more demand for sale methods that appreciate the value of time. While real estate auctions have been historically linked to times of depression and used as a last resort, we are seeing more and more sellers choosing the benefits of a time defined auction sale as a FIRST CHOICE!
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Posted by robmayo
June 18, 2011
It has been a couple of years since my last visit to the lone star state when I bought a truck from an eBay seller in Dallas. That is a whole other topic for another day.
My first visit was in 1989 when I was assigned to Fort Sam Houston in San Antonio as a fresh US army recruit straight out of basic training.
At Fort Sam I learned the skills of an EMT (Emergency Medical Technician) and Army Medic. One of the most important things I learned was the principle of triage.
Triage is the process of evaluating multiple casualties or patients and applying the necessary treatment in order of necessity.
Although what we do is not life or death, it is very important to our clients.
Understanding triage has helped in my personal and business life in many ways. One example is as busy auctioneers, we often have many projects running simultaneously. These auction events are always time sensitive and our clients depend on our ability to execute the necessary elements in a timely manner for a successful sale of their property or assets.
Having the ability to continuously prioritize and reassess the many elements in each project while remaining focused on providing the best service possible has helped me tremendously in my career as a professional auctioneer.
I had a wonderful time at The Texas Auctioneers Association Convention, and hope that my presentations on auction technology was of value and service to those attending.
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Posted by robmayo