October 3, 2011
Myth 9 – All auction companies are the same, and all auctions are run the same.
Make sure you read the terms and conditions for each auction and that you call the auction company to ensure that you understand their use of specific terminology.
There are many variables that should not be assumed to be the same for every company. One example is that some companies utilize a percentage of the high bid while others utilize a flat amount for the deposit on auction day.
Other considerations are licensure and continuing education within the real estate and auction industry. It is important to work with auctioneers who are committed to their industry. Several questions to ask a prospective auctioneer or auction company are:
Are you actively involved in the National Auctioneers Association? Do you have additional certifications of industry related education such as Certified Auctioneers Institute, Accredited Auctioneer of Real Estate, Auction Technology Specialist, etc?
It is my opinion that we should never stop learning, and never stop striving to be the best that we can be. This is the only way that we can ensure that we are always on the cutting edge, and suited to help our clients in their time of need.
There are a lot of great auctioneers and auction companies out there to choose from. Understanding the differences between them can help you find a provider who is a good fit for you and your specific needs.
Leave a Comment » | 10 Myths of Real Estate Auctions, Auction Education, Auction Talk | Tagged: auction companies, auction industry, Auction Technology, auctioneer, auctioneers, myths of real estate auctions, national auctioneers association, real estate auction companies, real estate auction myths, real estate auctions | Permalink
Posted by robmayo
August 23, 2011
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.
Leave a Comment » | 10 Myths of Real Estate Auctions, Auction Education, Auction Talk | Tagged: market value, minimum published bid, myths of real estate auctions, professional auctioneer, real estate auctions | Permalink
Posted by robmayo
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.
Leave a Comment » | 10 Myths of Real Estate Auctions, Auction Education, Auction Talk | Tagged: absolute auction, highest bidder, property sold at auction, real estate auctions, seller, terms and conditions, winning bidder | Permalink
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.
2 Comments | 10 Myths of Real Estate Auctions, Auction Education, Auction Talk | Tagged: auctioneer, continuing education, Kansas, MLS, myths of real estate auctions, professional real estate auctioneer, real estate auction companies, real estate auction company, real estate auction myths, real estate auctions | Permalink
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.
Leave a Comment » | 10 Myths of Real Estate Auctions, Auction Education, Auction Talk | Tagged: myths of real estate auctions, online bidding, professional real estate auction company, real estate auction companies, real estate auction myths, real estate auctions | Permalink
Posted by robmayo