Frequently Asked Questions from Sellers
What types of properties do you sell? We auction all types of real estate from condominiums, single family homes, land, vacant properties, commercial and investment properties to farms, ranches, and ongoing businesses. We have been successful in all of these categories.
I am concerned about the net amount I’ll realize from an auction because I need to cover my mortgage? We Understand your concerns and your need to cover an existing mortgage on your property. Auctions are designed to accelerate the sale of property by determining what the market is willing to bear. On auction day, the market will determine what valuation is acceptable for your property. The fact that you are selling by auction does not decrease the market value of your property. In short, if the market value is at a level below your existing mortgage, then that is the price that you have to work with regardless of whether you use the traditional method or the auction method to sell property. It is possible, however, to auction your property with a reserve price that you are willing to accept.
My property is priced below the market right now. What is this going to mean if I choose the auction method? Oftentimes we find that price is not the primary reason for a property not selling. The primary cause for it not selling may be due to inadequate traffic, and therefore, insufficient interest in the property. In other words, it has become “stale” on the market. The auction process is the best way to revive interest in the property and instill excitement that will result in a positive sale.
Can I attend an auction before I agree to sell my property via auction? Certainly. We encourage your attendance and we will be pleased to have you experience the excitement of the auction process firsthand. Just talk with a Powell Auction representative about our upcoming auction schedule or visit our website at www.powellauction.com.
How often do you hold auctions? We conduct auctions year-round and on any day of the week. You will work with a marketing consultant to set a date for your property.
Where will the auction be held? Auctions are held on site, or at our auction gallery in a ballroom setting. After a marketing consultant has inspected your property, we will advise as to what we feel is the best choice.
I am not in financial trouble and I’m concerned about what people might think if I should auction my property. You are not alone in your concerns. Many people are afraid of the outdated perception of auctions that some people have. There are great differences in the marketing and the public image of voluntary, by-choice auction such as ours verses a distressed property auction. Our auctions are positive, enthusiastic events designed to generate competitive bidding to secure the highest possible market price for your property. According to the National Association of Realtors, it is estimated that one in every three properties sold in the next 10 years will utilize the auction method of sale.
What is the customary fee for an auction and who pays it? There is no standard commission charged by auction firms. Customarily we charge the buyer the commission.
What is the best auction method? The surest way to effect a sale is to auction Absolute. Through an Absolute auction, you will generate the ultimate competition which will lead to the strongest dollar offer for your property. With a Reserve auction, you have the right to refuse offers below the reserve price set forth in the auction contract. In this way, a Reserve auction can provide security to the seller in the event of unforeseen circumstances. When you elect to use the Absolute method of auction, the property will be sold to the highest bidder regardless of price.
Why Sell Real Estate at Auction
Speed of the Process
Once a seller has agreed to auction their property, a date is set for the auction. The seller knows the exact date when their property will sell. Sellers avoid long listing periods associated with traditional real estate sales and also abate the holding costs that may accrue during the time a property is on the market. As a seller, you will see the results in 60 to 90 days instead of months or years with traditional methods.
Property is Sold With No Contingencies
All properties sold by Powell Auction are sold with no contingencies and in their current condition. In order to disclose all pertinent information to the potential buyers, the seller must provide us with all information about the property. We then provide to the bidders a Property Information Packet prior to the auction. These packets disclose everything we know about the property to be sold (as due diligence). Potential buyers are given ample time to inspect properties and make an informed decision prior to the auction. Sellers do not have to worry about contingencies and negotiations holding up the closing process.
Sellers Know Exactly When Their Property Will Sell
As mentioned, sellers avoid the long listing periods that may occur with traditional methods of real estate sales, especially when the real estate market is slow. Through the auction method, the buyers act on schedule. Additionally, they avoid the seemingly endless flow of people inspecting their home at a real estate agent’s whim. This is especially helpful to those individuals that have been transferred or have purchased another property and are looking to sell quickly.
In the auction business, we take the normal six month real estate sales process and compress it into weeks. In this way, we are able to put together a blitz marketing campaign that can save money for sellers in the long run. The promotional focus is on your property exclusively. This enables each marketing dollar to have a greater impact.