5 Tips in Choosing a Real Estate Auction Company

Real estate auctions can be disastrous with the wrong auction company.
Here is advice on choosing the best!

Published: October 2, 2006

As the housing market continues to slow, real estate auctions overwhelmingly have demonstrated an ability to sell properties. With the benefits of selling in 60 to 90 days at fair market value, many real estate professionals are either starting real estate auction companies or creating auction divisions within their agencies.

However, auctioning a property is far more complex than listing one. It requires aggressive marketing and promotion, coordination of the auction event itself, and following up on hundreds of potential buyers. Since an auction attracts all the interested buyers at one time, you only have one chance to get it right. Therefore, not choosing the best auction company for your property could lead to disastrous results.

Here are 5 things sellers should consider:

1.      Choose a company with experience and success in auctioning properties.

As stated earlier, auctioning a property is much different than listing one. Sellers should always ask how many properties have been sold at or by auction. Previous auction information and sales records should be available to the seller. In addition, companies should also provide case studies that give the seller a better understanding of the auction process.

2.      Find an company that specializes in the type of property you want to sell.

Various auction companies specialize in luxury homes, unique properties, land parcels, multi-family living and commercial real estate. By using an auction company that focuses on similar properties, sellers can tap into a deep reservoir of interested buyers the company has attracted over its experience.

3.      Use past national and metro newspapers to determine a true success rate.

Very few companies publicly post their failures. Check previous real estate sections of newspapers like the Wall Street Journal or those in the nearest metro area. If you see an advertised auction that doesn’t appear on the company’s Web site, ask for an explanation.   

4.      Beware of companies that do not post sold amounts of their auctions.

Yes, properties get sold at auction, but they also can be sold for much less than they’re worth. Not posting the sold amounts of auctions is always a red flag that the auction company is not properly marketing its properties or conducting auctions.  

5.      Beware of companies with low or no upfront marketing costs.

While auctions are extremely effective, you only have one chance to get it right – otherwise it may be years before your property sells. So it is absolutely crucial that you have adequate marketing and personnel the first time. An auction company should provide a seller with a line item list of how money will be spent, whether its upfront or not. Sellers should make sure it includes everything such as media publications, appraisals, inspections, auction staff, rentals, food, and security.

If your home has been sitting on the market for several months, it may be time to seek a real estate auction company. Keeping these five tips in mind will help you find the best one for your property. For more information about selling your property at auction, contact Grand Estates Auction Company at 1.800.552.8120 or www.grandestatesauction.com.