How do you reach those buyers that are not being reached? Could using a well established auction company provide the results you need?
This is a new concept for me, so let me share what we are learning in this exploration process. These well established auction companies are selling everything from high-end mansions to smaller homes and land through auctions.
What they have to offer is their unique method and market segment in which they promote their properties. They offer a massive, global, all media marketing and advertising campaign to promote, manage, and execute the success of the auctions. They have an established client list and are reaching potential buyers looking for the properties and investments that are right for them.
Beautiful Kauai sunset
Not all properties are candidates for these auctions. The ones that seem to do the best are those that offer something above other properties on the market. This doesn’t mean they have to be high-end, but simply could be in the right location, have zoning or features that are favorable, offer views that are popular, priced at or below current market values, or have anything that shows your property offers that something extra. We can help you decide if your property has auction potential.
The seller of a listed property will need to consider several things:
1. Are they sufficiently motivated to sell their property? This means that if they receive an offer to purchase that is reasonably close to what they want for their property, are they ready to make that decision to sell?
2. Are they ready to accept what the actual market price is for their property? This means owners that have their properties listed over today’s market value and are prepared to wait until the market returns sometime in the future—are not good candidates.
3. Has the property been on the market for months, or even years with little or no activity? A good indication that the market you have been reaching has gone stale.
4. Are they ready and prepared to do what is necessary to sell their property? Motivation is a key element in a successful auction!
The first step is to get your property before an agent that is preparing properties for auction. Right now, we are working with several sellers for an upcoming auction in late November in Hawaii. With this auction company, the seller pays an upfront fee of $5,000 directly to the auction company to cover all the extensive marketing of the property. If the property does not sell in that auction, it can be re-listed in another future auction without another marketing fee.
Then, as your real estate agent, we assume the responsibility of providing the auction company with all the tools and information needed to market your property. We will then hold open houses and showings by appointment during the approximate 60 days of marketing.
Many people bidding in these auctions are doing so sight-unseen, based on the reputation of the auction company. All bidders are registered and pre-qualified to make the purchase up to the amount they bid. You are assured that if someone bids on your property, they have the means to purchase it.
There are two types of auction choices:
- You start with a minimum bid. That minimum bid becomes the lowest price at which the property will sell.
- You start with an opening bid, but have an established “reserve,” which means there is an unpublished minimum price at which the property will be sold. The reserve price is established between the auction company and the seller, but remember, this reserve will have to be something within the market range, or there is a chance that your property will not sell.
An advantage to the seller is that they will pay NO commission on the selling price. The commission is added to the buyer’s bid and all commissions are paid by the buyer. The savings on commissions can provide more net proceeds in many auction sales.
Just another beautiful day on Kauai
My sister and I work as a team on Kauai, and we are excited to be able to offer our clients this auction process as a possible alternative to getting their properties sold.
If you have a property that is not listed, but you would like to explore this auction process as a means of selling your property, feel free to contact either one of us. We will share with you what this national leader in the “fair market disposition via the auction method of unique and luxury real estate” can offer you.
We are nearing the final days of being able to add properties to the November auction, so if you would like to be included in the November auction, you need to act quickly. Otherwise, we can direct you toward a future auction sometime early 2012.
We look forward to answering any questions you may have. Have a wonderful Aloha Day!