Auctions in today’s economy are getting higher value for property and smooth, quicker sales than some clients expect. When home sales prices are down in traditional listings, as has occurred this year, sometimes people expect homes at auction to bring low prices also. However this year many sellers have found that the targeted marketing and competitive atmosphere among buyers created by auctions has brought at least fair market value, and sometimes higher prices, for their homes.

That is why bankers, attorneys, court appointed trustees are also among those who are turning properties over to auctioneers to sell.

This year has brought a large number of home foreclosure auctions across the country as homeowners default on loans when they could not pay the rising interest rates. Some of these homes went to foreclosure auctions. However that does not automatically mean a forced sale brings a low price. In fact, whether it is a foreclosed home or a newly-built home (which some builders sell by auction!), the job of the professional auctioneer is to find buyers in advance, get them to an auction and encourage them to compete to bid up the price.

Do not fall back on the myth that auctions bring low prices. That is simply not true. Sellers find tremendous return on their investment with auctions, and they like having the option to set a reserve price, a minimum they will accept, as a protection against a low price. Details on a reserve price can be set in your contract with an auctioneer.

Also, auctioneers are working more closely with Realtors than ever before. Auctioneers are partnering with Realtors in selling some homes by auction, with both parties getting paid in the process. Realtors are finding out how strong the prices obtained at auctions are, prompting Realtors to come back time and time again to partner with auctioneers. Whether you are a Realtor, banker, judge, individual homeowner or estate executor, there are many reasons to consider auctions as a method of fast sale that can obtain good prices.

Reprinted by permission of the National Auctioneers Association.
Source, Auction Advantage Fall 2007