“Going once, going twice… Sold!”
When you think of an auction, you probably think of a fast-talking auctioneer and hopeful buyers throwing up bids left and right. Or you might think about a local charity or school-sponsored event, or even virtual bidding on eBay. While auctions are all over television and online, have you considered how the auction process works when it comes to real estate? If you are looking to sell your home anytime soon, you should get familiar. With billions of dollars of real estate selling every year at auction, this could be your opportunity to sell it for a higher-than-market price.
Since 2007, thousands of properties have been sold at auction by groups such as FDIC, Fannie Mae, banks and hedge funds. Primarily, these groups have used auctions for two particular reasons. The first is getting a property sold in a timely manner, and the second is to get the true market value for the property. During these times, auctions have been instrumental in helping markets recover by putting the properties back into the hands of end users and investors. In return, these new owners invest in home improvements, shelling out for lumber, paint, windows, etc., thereby producing jobs and stimulating economic growth. Currently, we have reached equilibrium to Atlanta’s home price highs of 2007. according to the most recent data from the Case-Shiller Atlanta Home Price NSA Index. With no clear signs of growth stopping, Atlanta has become a seller’s market once again.
In my 20 years of real estate experience, I know what sellers are looking for: marketing exposure, acceptable price, expedited timing and low cost of sale. Fortunately, auctions are designed to accomplish all of these dynamics and more. The auction process starts with a very robust marketing program to capture the attention of both local and national bidders. With these marketing efforts comes a specific date and time of sale, so the seller knows exactly when the property will be placed under contract. Having competing parties ensures that the seller is getting a value truly reflective of the market conditions. In fact, in a seller’s market like Atlanta is experiencing, the competition among bidders can drive values higher than normal market conditions. Finally, the most important aspect of the auction is the closing. You may be surprised that the closing ratio is typically over 95 percent. This is because each prospect is placing a bid on the property in “as-is” condition, agreeing to sign a no-contingency contract and will be putting a larger than normal deposit down.
About Buddy Lee
Buddy is the Director of Business Development at John Dixon & Associates (JDA) and has been involved in selling more than $300 million in real estate at auction. JDA is a national real estate auction firm headquartered in Atlanta with offices in Florida, North Carolina and South Carolina. If you would like to learn more about auctions you can reach Buddy at 850.765.2353 or firstname.lastname@example.org.