My Journey To Sell My Home At Auction And The Five Steps That Were Involved

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Have you considered auctioning off your home? Even though auctions are traditionally more popular with paintings, antiques, and real estate foreclosures, auctions are growing in popularity among sellers with solvent, good condition homes as well. Here are a few reasons why an auction could be a good idea for you and what to consider when starting the process.

Why Some Sellers Like Auctions

With the current market an auction is not only for foreclosed homes. Many auction professionals are used to selling conventional homes. Why you might ask? Many people are finding out that they can get just as good sale price, but the auction is faster and far more efficient way of selling a home. About 10% of the homes get sold for an even higher sale price then the seller would have otherwise asked, based on information from Williams & Williams who is one of the largest auction firms.

If you use an auction you will show your home over a period of weeks, in which the prospective buyer can look at the home, and then the auction will take place and in minutes the house will be sold and the closing will typically take place in about a month. If you are selling a home through an auction you can save a lot of time and hassles.

1. Pick A Good Auctioneer

Auctions are only as good as the auctioneer who presents your home. They are your marketing agents that show off the property and conduct the auction in such a way that it brings in the best bids. So, what type of auctioneer should you choose? You should choose one that is experienced about your home in particular. There are several types of auctioneers ranging from antique dealers to multimillion dollar mansions. Pick the right one for you, and verify their credentials to ensure a fast home sale.

2. Figure On A Pay Arrangement

Different auctioneers have different forms of payments. Some, like real estate agents, will charge between 6-10% of the closing sale price, while others will do a flat 10% auction premium that the home buyer must pay. Still others will favor splitting the difference between both buyer and seller.

3. Which Method Of Auction, Absolute Or With Reserve

If you go with an absolute auction you will not have any price that has to be met in order to sell the house. In this type of auction the highest bidder will be the one that wins, no matter what price the house sells at. A reserve auction is one that has to meet a minimum price before the house is able to be sell. Most of the time an absolute auction is more dramatic and will also end with a higher final sale price. A reserve auction is much safer but will not usually yield the same final sale price. Also keep in mind that if you do an auction with reserve, and you are not able to get a bid high enough to meet the reserve you will still have to pay the auctioneer fee, and it is sometime as much as if the house had sold.

4. How To Qualify Bidders

There are variations but generally auction companies require letters of credit from bidders stating that they can complete the sale. On the other hand, some companies just ask for 10% of the expected sale of the property up front, in which those who do not win will receive this money back.

5. How To Accept Bids

Are you going to have all of the bidders gather on your lawn? Will your home just be one of many other homes and everyone involved will gather in a central location? Are you going to allow people to bid via the phone and the Internet? Many people will opt for the yard sale, and it does work, but central location auctions will typically end up with a higher final bid.

As you have discovered there are quite a few things that you need to keep in mind when you are planning an auction but once the auction is actually underway it is a lot less of a headache then if you had sold your home privately through the traditional way.

By Melissa Gifford

Source: "PopularArticles".
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