I have grown up in a family of auctioneers and attended many auctions in my day. I am the only Realtor and Appraiser in my family who chose not to obtain my auctioneers license. Let me explain.
It has always surprised me that a homeowner would surrender their property to the “highest bidder of that day” with no reserve. A reserve is when a homeowner gives a bottom dollar to the auctioneer that they are willing to take and then refuses to sell for any less.
The only problem is, with these types of auctions, they must still pay a fee and reimburse the auction company if the house doesn’t sell to meet the reserve price.
So most people opt to sell without the reserve, however this is a very risky move on their part.
Most auctions are held at the subject property. Some auctioneers hold an “auction” of several homes at their office in one night, but I will touch on that subject later in another post. (This is a really bad idea.)
There is usually personal property involved, and a lot of times this is done to settle an estate.
The heirs don’t know what to do with all of Dad’s tools or Mom’s craft stuff so they just decide to auction and get rid of everything at once. Bad idea.
Homes almost always are increasing in value. Used furniture, tools and such, always decreasing. Why would you lump the two categories together if it made you lose money on the largest investment you or your loved ones have made just to get it all settled in one day?
Here is why you should not auction your Property if you want to earn the most profit:
On the day of the auction, weather (which no one can predict in advance ) can play a huge role in who will show up to bid. Now with very few bidders, there is very little competition. With little competition, prices will stay low. That is one factor.
Another reason property sells low is it is usually the investor buyer bidding on the property. With no emotional attachment or dreams of raising their family there, they are very stingy with their money and their bids.
If you are needing to settle an estate, or just moving out of the area and want to sell “quickly”, you might be considering an auction.
Then consider these two homes. They are on the same road not even a mile apart. Exactly the same vinyl siding, similar in age, with same acreage. Both of these homes had basements, detached garages, and each were 2 Bedroom homes when they went under contract.
Both sold in the Fall of 2015.
Here are the Results:
Both took the same amount of time from the Pending sale date until closing. An auctioned property does not usually close any sooner than a property sold by a Realtor.
That is $37,000 less, folks. That is a loss of around 32 % ! That is almost 1/3 of the price. LOST forever. Talk about your “ Last chance” as the Auctioneers like to shout!
Don’t trust your biggest investment to the weather, because it may be raining or snowing or hotter than Hades. Or to strangers who want to take advantage of the fact you have decided to auction and know they will walk away the winner because they will get your home , farm or business for less money!
There may be a huge price to pay in the end.
And if you have personal property to dispose of, there are other companies that will come in and buy that separate. This will also save you the agony of watching your childhood memories be sold off at bargain basement prices. And most likely you will “net (the money you put in your pocket)” the same if not more money by the time you pay the auctioneer a huge percentage.
I have several more examples if you need more to convince you.
Contact me at 270 244-0040 or email me at Janie@janiemarksberry.com
You’ll get more money in your pocket using our Flat-Rate Fee program; Full-service MLS listings for thousands less!