As the traditional listing method of selling real estate continues at a reduced pace in mid-2007, selling real estate by auction has become the fastest growing category of all auctions. Many bankers with real estate portfolios to sell have discovered the advantages of selling by auction and are hiring Auctioneers to sell these homes, commercial and industrial properties.

Residential real estate auctions grew at a rate of 12.5 percent in 2006, above the 2005 figures. Overall, residential real estate generated $16 billion for 2006. The 12.5 percent compares to 8.4 percent for the previous year, showinghow much this category is growing.

What are the advantages these bankers are seeing? Two big benefits are (1) a specific date of sale can be set (often only 30 to 60 days out) and (2) a minimum bid price can be set.

Bankers don’t want to let properties languish in a traditional listing as carrying costs pile up, so setting a firm date of sale drives urgency in marketing, interest from bidders and a more rapid closing. Setting a minimum bid price is important to bankers who know the numbers they need to make a deal work. Professional Auctioneers know this, and work easily with this type of auction, called an “auction with reserve.” In this type of sale, bidders are clearly told that a minimum price exists and must be met.

Today’s real estate Auctioneers are highly-trained in all aspects of property sale, including the varied auction methods, applicable laws, standards of practice and valuation procedures.

It is also not unusual today for the urgency created by a well-marketed auction to spur at least one bidder to want to buy a property before the auction. A motivated buyer may meet the initial asking price well before the auction, wanting to not lose the property to other bidders on auction day. If a bidder requests an early purchase, the Auctioneer works with the seller and completes the sale well before auction day. There is nothing improper about this early conclusion to an auction arrangement because the Auctioneer’s primary duty is to the seller.

For these reasons, and more, bankers, lawyers and other business professionals are hiring Auctioneers at a more rapid pace to liquidate property portfolios in a professional manner. To find out more about Auctioneer services, call our office.