How much of a commission to real estate auctioneers take and where do I find a list of reputable companies.?

This question posted in Feb 2008

I love auctions!
Auctions raise the cost of selling a home from the traditional 5.5 to 7 % up the 11% or 16%!!!

Why I love them so much is everyone involved feels like they got a deal!
They beat the system!
They did it their way!

And everyone, except the home seller...made more money!!!
I do love auctions.

Another thing I like about auctions is all those folks with those printouts from Zillow with a value of $127,00 for the house. Within seconds the Zillow thought balloon explodes as the bidding heads beyond $180,000.

And everyone feels they got a deal! While the reality is, the cost of selling real estate went of dramatically.

I am CEO of J.L.Todd Auction in Rome Ga. I have been in the auction profession since 1985 and we work strategically with Realtors and sellers alike to help them obtain the highest price possible at auction. We are not a large firesale company, we do want investors at the auction but we also what the users there he will pay fair market value. A realtor can pool attractive listings together that will close in 30 days from the auction date. You will get paid! Feel free to call me personally, all realtors need the option of offering auctions and we would be honored to host your company meeting for a Q and A session.
Benefits are:
Buyers come prepared to buy
Aggressive marketing
All sales are cash, no contingencies
Eliminates negotiations
The seller can turn assets into cash and eliminate carrying cost
Randy Land http://www.jltodd.com 706-252-0532

There are several auction companies that are outstanding resources for Real Estate Agents. They rarely sell for the agreed upon price, as a result they usually collect a referral fee from the Real Estate agent. Others use it as a gimmick to add to listings.

The kicker for almost ALL auctions is their target market. First time home buyers? NO Move up buyers? NO... Relocation? maybe.... main target? INVESTORS! That's right, I've spoken with several that spend up to $10K advertising directly to investors.

So, the question is, when an investor comes to look at your house at an auction, do you think he/she's coming to pay market price?

Another question is, Which is better?

A. Sell it in 6 months but close to what you agreed to
OR
B. Sell it in an action for 70% (MINIMUM) value

My agency recently began offering auctioning as an option to sellers. The auctioneer typically charges a 10% BUYER's premium. If there are any agents involved in the transaction, they take a negotiated percentage of that 10% premium. The seller pays a non-refundable fee to the auctioneer to cover the cost of advertising the auction, as well as any other expenses incurred.

There are two types of auctions available to sellers. There is the absolute, wherein the bidding starts at $1. The idea behind the absolute auction is that it is designed to get the buyers excited, and HOPEFULLY, will bring a bidding war, and ultimately a higher price. But, of course, it is risky if you're hoping to make some money. The reserve auction establishes a minimum bid for buyers to begin with. If the reserve is not set competitively, you'll never get out of the starting gate.

I hate to think that you want to auction your home in East Point just to avoid a 6 month contract with a Realtor. Shop around, not all agencies require a 6 month contract - it is a negotiable item (as with everything else). Just remember, giving your agent ample time to help find the right buyer is in your best interest, particularly in this market.

As you know, I'm sure, East Point/College Park has a lot going for it, and it hasn't peaked yet. My husband and I purchased our first home in East Point in 1997, and sold it in 2003 for a nice return. My sister and her husband still live in East Point, and I have really enjoyed watching it grow - so much since 1997! Depending on when you purchased your home, and for how much, you should be able to turn a fairly nice profit if you go the traditional route.

Just remember, your Realtor should be 100% accountable to you, 100% of the time.

Michelle Campbell
Realty Executives of Atlanta

I think, as long as you are not emotionally attached to the result, that auction sales are a fantastic way to sell property. "Sell" being the operative word. Get it sold...as long as it closes.

One of my favorite memories of last year was attending an auction. The auctioneer made a lot of money, and as the auctioneer said many times, a lot of folks "bought themselves RICH" that day.

The auctioneer made 10% per transaction. They had a team of about 20 people to pay, including a 75 year old organ player. He played dramatic flourishes on the cheezy organ in pace with the auction drama. Tons of fun! They had a hotel bill to pay, plus lots of marketing costs. They deserve 10%.

Auctioneering is a great way to pull in gross commissions of well over $350,000 in just 3 hours, by selling about 50 or 60 properties. As long as all of those transactions close, the auctioneer makes money. As a Buyer's Agent present at the auction, if my registered Buyer buys, I receive a 5% commission - the auctioneer splits their gross commission because a competent Buyer's agent will get the Buyer to closing.

I read somewhere that over 30% of all auction deals fall apart after the word "SOLD" is yelled out (and the organ grinder plays "Happy Days Are Here Again.")

That means that 70% of the time the property will sell at auction. Not bad.

About 2 out of 3 listed houses are not selling in Atlanta. Your chances are better by selling at auction.

Selling is the operative word. I did not mention profiting.

You have a much better chance of making an additional 15-20% or more if you list your property for sale and disclose the truth about any material defects...you really do. However, if you are not emotionally attached, then lets start the bidding at $10,000.00.

It will sell in 30-60 days if it is priced correctly and marketed properly by a competent, hyper-local real estate agent. It will “cost” less to sell too.

If you need an auctioneer, just google for one, dude.

Get your real estate on!

C.Case,
I have not have much selling experience with auctions but, I have bid on properties at auction. Auctions attract wholesale and investor buyers who only pay cents on the dollar. I have yet to see a property sell at full or market value. If cost is a concern to you, then possibly too, you should consider your net (after sale/ walk away funds). An auctioneer either sales the properties with a "reserve" or "absolute". If your not familiar of the terminology you maybe be in for more than expected.

Sorry to here you had a bad experience with a past agent. Remember, all dogs bite too. Right?

If you want a good experience getting your home sold. Look around and see who is selling in your area. Not the agency or company. It's the individual agent and their activities that get a home sold. Get a recommendation from someone who has had a good experience. Interview, face to face several. Have the house in top condition. You're now in competition and buyers are comparing. Price the home at or slightly below market value. "What....Why?" Your home will be viewed more and in many cases, if your home shows a lot of value for the money... you'll either get a quicker sale or multiple offers. Keep in good communication with your agent. Really they should be accountable to you. The 6 month listing contract is a commitment I expect from my clients. If I am vesting my expense and efforts, then that is all I ask in return. Placing your property with a REALTOR does not cost you a thing until it's sold. Should you find your not receiving the performance as described, the contract outlines how the listing agreement can be terminated. Consider researching agents who are listing on this site. They are the ones who are active in there business. These responses you're receiving are from individual agents sharing their experiences and on their our own time.

Best wishes for a smooth transaction,

Robin Lanese
678-942-0624

In my experience, auction companies charge on average 10% of the sale of the property. There are several options when auctioning your home. Set a reserve, or minimum sale price (these properties typically do not sell at auction because buyers are "out for blood" and looking for an amazing deal). Another option is no reserve, simply selling the home for the highest offer on the day of the auction (most homes in this situation sell for a significant percentage off the market value).

The best way to get your home sold relatively soon is to list it with an agent familiar with your community and price it between 5 and 10% below current market value. You will save time, and in the end get more money that if you priced it at or above market value (especially in this time of falling home prices). This is because, if your home does not sell in the first 30 days, you will then have to reduce the price anyways, and it will seem less attractive as it sits on the market.

Hope this helps!

C Case -
I am sorry to hear that you had a bad experience with a real estate agent before.
Not everyone in this industry has always been as professional as the could/should have been.
I think you will find you will get some excellent answers here from some true professionals.

I am not aware of what an auction company charges, but it can be a viable option for a quick sale.
Here is a great website to at least help you gather some information.
http://www.hudsonandmarshall.com/faq.asp

Best of luck to you.

Well, you have a question and a reason for not using a REALTOR in one Statement. I worked for/with an ARMY General who once said to me...... "That is what I call; I'm going to TOLD you a question..."

It made me laugh at the time. OK, back to work...I can't truly answer your first question because I have not had a good experience with auctioneers. Most of my clients have just come back minus the $3- 5 thousand auction advertising front fee and still had a house to sell.

If you can find an auction house that will take it on a commission basis, then I would ask for multiple references and also check them out on the web. Auctioneers must be licensed and must belong to a professional society, so you should be able to verify their work.
(my uncle is the most famous auctioneer in the world http://www.phillipsdepury.com/ and yet I know so little about auctions.

As to the REALTOR....allow me three questions....

Have you ever had a bad meal in a restaurant?

Did you ever eat again?

How did you find your last Realtor?

If you decide to go that route....go through your area and other areas like yours (price range wise) and start looking for signs of Realtors who work in that PRICE RANGE. Make a list of ten names that you have seen more than once and interview the home sellers. Knock on the doors and ask them what they think of the REALTOR. Design a rating scale. Then interview the REALTORS themselves and find one that way. If you would like a list of interview questions...email me and I will send you one. The most important question, you would never think to ask and the REALTOR will not mention it, because it is NEVER ASKED....so he/she just won't think about it.

I hope this helps...


Thanks
Gary De Pury
Broker-Owner
Bay Vista Realty & Investments, Inc.
Chairman, Communications Committee
Director, Florida Association of REALTORS®

If you want to sell your house for much less than what it's worth, you should sell your home with an auction company. Think about who will be buying your home at auction, and why they are purchasing at auction. Find a real estate agent who knows what they are doing, interview a few people so you don't get stuck with someone you don't like. Also, you should be able to sign a 90 day contract with someone instead of 6 months. Good luck!!!