Recently, we’ve been contacted by a seller who, after unsuccessfully selling their property with a different brokerage, decided to relist with Polaris Realty. Location is the obvious key factor when selling real estate, but timing is also important. How do you sell a property that was listed before without much attention? And especially during the COVID-19 pandemic? You have to think outside-the-box and one specific strategy immediately comes to mind.
When it comes to auction sales, it’s likely that what you think of are desperate sellers or bank-owned properties. However, that’s all a thing of the past: The many advantages and the growing usage of competitive sale platforms have made property auctions increasingly popular. That’s also why Ron, the Founder of Polaris, decided to run an auction for this specific property.
For many real estate projects, auctions tend to generate greater engagement, bringing benefits to buyers and sellers alike. So, why and how should you utilize this out-of-the-box solution to sell your property?
Why consider selling at auction
A real estate auction happens when sellers partner with auctioneers or professionals that mediate the whole process. The event is then properly marketed to raise optimal interest, and happens either on-site or online. On a set day, qualified buyers are invited to submit competing offers, resulting in the sale of the property to the highest bidder. This whole process has three main benefits:
Auctions are fast, efficient, and have immediate results. They are organized within a set timeframe and the likelihood of selling the property is extremely high. Added to that, there’s no need for showings and open houses – the properties are sold as-is on the auction date, so prospective buyers are usually very diligent about their research and come ready to buy.
- Easy process
As properties are sold as-is, the process is very simple. Auctions don’t allow the bidders to add any extra conditions or request inspections or appraisals. Moreover, buyers can’t ask sellers to do any additional work on the property – so negotiation and haggling are left out of the equation.
- Competitive bidding
An upcoming auction had an original listing price of $1.2 million, but the auction is now starting at $895,000. The lower price attracts bidders and builds excitement, and competition is likely to raise the price much higher. As prospective buyers tend to be pre-selected and pre-qualified, you are likely to reach the market value.
How to list a property for auction
When selling your property through auction, your first step should be identifying the right auctioneer. Ensure that they are experienced within the domain, and ask for references. Knowing their focus, qualifications, marketing strategies, bidder qualification processes, and other factors will help you determine if they’re the right choice.
If you already have your property listed with a broker, you can also see whether the auctioneer can collaborate with them to make the process smoother.
You may have to decide whether you’d like your property to be listed for either an absolute auction or an auction with reserve. An absolute auction is one where the property is simply sold to the highest bidder. A reserve, on the other hand, requires the auction to reach a certain amount during bidding. This reserve amount is usually revealed before the auction itself, but can also remain hidden. Also, if the highest bid doesn’t reach the reserve, the seller can still decide whether or not to accept the offer.
Property auctions are a great option if you’re looking to speed up your selling process. And as online tools become more accessible than ever, online auctions specifically are poised to become even more popular in the future!
If you’re looking to learn more about property auctions, feel free to contact us.