Home Selling in 29306>Question Details

Cindi S, Home Seller in South Carolina

My almsot new house has been on the market for well over a year - we're baffled as to why it hasn't sold.

Asked by Cindi S, South Carolina Mon Feb 11, 2008

Can anybody give me a clue on how to get a house on the auction market? Anyone experienced this process before ? Was it a positive experience?

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8
No reason to be baffled. It's overpriced, based on its condition and location. While I'm not a rabid "cut the price, cut the price, cut the price" (other factors, such as a poor appearance, need for staging, etc., can be addressed to come closer to the price you'd like), it really usually comes down to price.

And, because it comes down to price, what's with the questions about an auction? Generally, auctions will result in a sales price of 90%-95% of the fair market value. Very, very seldom will an auction price exceed comps. So, if for example your house is priced at $300,000 and it hasn't sold in a year, then let's say the real value--the price at which it would sell--might be $275,000. In that case, an auction most likely will bring in somewhere around $255,000-$265,000. And that's on a good day. If you're lucky.

Now, auctions do have a value in today's market. But consider, too: In an auction, you'll very often be asked/required to put up several thousand dollars to market it. Plus, there typically is a 10% buyer's premium. So someone buying your house for even $275,000 will know that they've got to cap their bidding at $250,000 to keep their total expenditure down to $275,000. On top of that, most auctions sell the house in "as is" condition. That eliminates a major contingency and reduces the hassle factor of a buyer coming back and asking for repairs. But that also means that bidders will keep their bids lower, knowing that it's an "as is" purchase.

One other point to consider: You'll either sell your house "no reserve" (no minimum bid; the highest bid, however low it is, takes it) or "reserve" (a minimum price is set). In an auction using the figures above, your reserve might be set at, say, $225,000. Are you willing to sell your $300,000 house (truly only worth $275,000) for $225,000 if that's the highest bid that's made?

Auctions aren't the cure-all for overpriced houses. They can be effective in the right circumstances.

Hope that helps.
1 vote Thank Flag Link Mon Feb 11, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Cindi
I only have one question:
During the past year, have ANY homes like yours SOLD?
If that is true, then, assuming you have a competent Realtor, the property is probably over priced.

I don't know why you are selling, but what you paid, what you owe, how much you need to net, all have NOTHING to do with the market price of the propertyh.
1 vote Thank Flag Link Mon Feb 11, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
In this market, I would say price. Price is king. If it is getting shown a lot and not selling, then I would focus on price. Sorry I cannot help you on auctions for homes. Check with your banker. Bet they know one or two auction reps.

Bill Brannon
1 vote Thank Flag Link Mon Feb 11, 2008
Hi Cindi, Is your home competing with new homes in the neighborhood? This can make for tough resale.
In Real Estate, price cures all. I'd be happy to connect you with an auction house if that is the route you wish to take. We have several in the Spartanburg area that I have had success with.
Best of Luck!
Debbie Barnard
JOY Real EstateCo
0 votes Thank Flag Link Sat Apr 5, 2008
Cindi,
Check out Trademark Properties in Charleston, SC. Their reps were at my office a good week ago and it looks like they have very good idea about state wide auction. http://www.trademark-properties.com
Good luck!
0 votes Thank Flag Link Wed Feb 27, 2008
Cindi,

There are only three factors that you can manipulate to get you home sold - presentation, price and promotion (aka marketing). So that leaves you with a few questions:

1. Most importantly: Is your home listed? If it isn't listed, list it. And, if it is listed, do you have a good realtor that is applying proper marketing and sales efforts on your behalf? Sadly, many agents do not.

2. Is it in the proper condition to sell? Staging is great, but concentrate on cleaning and de-cluttering first.

3. Is your home properly priced? Make sure you get the opinion of a knowledgeable local realtor on this. Home valuation websites are useless and you are too biased to know this answer yourself (no insult intended - every owner is).

I hope this helps.
Web Reference: http://www.stevebright.net
0 votes Thank Flag Link Wed Feb 27, 2008
Cindi,

I would have to agree with Don on his thoughts regarding auctions. They are not a cure-all for all sellers, but they can be just right, depending on your circumstances. I am enthusiastic about exposing the idea of an auction as alternative for sellers to explore. What I did not want to do was to talk you out of it before you really looked into it.

As Don and I agree, auctions are not for everybody. But, I will say that every seller at the auctions that I have been to has been quite happy with the results: SOLD and ended the year long effort to sell. I have actually seen a seller net $80,000 more that they had hoped for.

The as-is sale scenario that Don mentioned is true, however bidders are encouraged to perform pre-inspections. They are not in there bidding on a property about which they know nothing. If there are problems with the house, then, yes, they do figure that in their bids as they should. You say your home is almost new, so it should not be discounted in the bids due to condition.

The first thing to do is the speak with an experienced auctioneer to see if your circumstances are a good fit for an auction.

Let us know what direction you decide to go.
0 votes Thank Flag Link Tue Feb 12, 2008
Cindi,

I am in the Charleston area, and I have been to many real estate auctions here. Some of the outcomes are great for the sellers, and some of the outcomes are great for the buyers. It really depends on the type of auction that you elect, and also the type of property that is being auctioned. The great thing about auctioning your property is that it works: 30 days to market, 1 day to auction, 30 days to close, no contingencies!!


If you would like the name of a real estate auction expert in Spartanburg, contact me through my website. I look forward to helping you.

Dan Mengedoht
0 votes Thank Flag Link Mon Feb 11, 2008
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