Question Details

Deborah Madey, Real Estate Pro in Brick, NJ

Are you seeing more auctions in your marketplace?

Asked by Deborah Madey, Brick, NJ Wed Sep 12, 2007

RE PROS: Are real estate licensees permitted to conduct auctions in your state? Are you seeing more auctions? Do you receive inquiries? CONSUMERS: Are you interested in auctions as either a buyer or seller? Who do you think benefits most from an auction?

Help the community by answering this question:

Answers

2
Deborah,

I work for the largest real estate company in Charleston (about 1000 agents). About two years ago this new agent (new to company, not new to RE) joined the firm and touted his services as an auctioneer, an alternative way to sell property. We all thought he was a little crazy: why would we need to auction property off in this (good) market?

Well, now his phone is ringing off the hook. He did about a dozen auctions in 2007. One seasoned agent had coursely dismissed the auctioneer's auction proceedure as one that his (seasoned agent) clients would never need. That agent had a listing client ask about the auction idea. The house went for 92% of list price!! Needless to say, the seller and the agent were quite pleased. The agent, who had dismissed auctions as not for him, is now one of our auctioneer's greatest advocate.

I have been to many real estate auctions in the Charleston area. 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 the seller elects, and also the type of property that is being auctioned. It is clear that the absolute auctions are the most productive, because more buyers come out to bid. The auctions with a reserve tend to attract less buyers. I saw an auction a few weeks ago where the property sold for about $60,000 less than many of us thought it would, but still, the owners were very pleased to have an end to their year+1/2 efforts to move on from the property. So, it really benefits all parties, in most cases. I have actually seen sellers net more money than they were hoping to get. Auctions Work.

Our auctioneer charges no commission to the seller. He does charge the buyer a 10% buyer's premium, which pays for the advertising, the buyers agent, and sellers agent, and the auctioneer fee. Properties are sold as is, where is, with no contingencies on condition or financing. 5% of the purchase price is collected at the auction as the earnest money. He advertises for 30 days, auctions, and then closes in 30 days. So, in 60 days, almost any property can be sold and closed. This year, he expects to do about 2 per month. Many of his auctions are multiple property events, such as for builders with several homes on a street.

He is required to hold a SC Auctioneer license. You have to have a license to call an auction, and must include you license number in all advertisements for auctions. Apparently sealed bid, or silent auctions are not as regulated. There is an agent with no auction license here that has signs at all the intersections advertising an auction, however there is no auction: it is merely a lead capturing gimmick.

I hope this helps. How is the auction activity in New Jersey and Florida?

Best Regards,
Dan Mengedoht
0 votes Thank Flag Link Wed Jan 16, 2008
I'm hearing them constantly advertised on the radio lately. They have been for $2 million homes. I notice one closed sale that didn't make sense and when I checked it out I found out it was an auction. Last year I know of a couple auctions but I know one didn't sell and the other I don't know the results. I would consider it if I knew there were buyers out there.
Ruth
0 votes Thank Flag Link Wed Sep 12, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer