Real Estate Auction Blog

I consider myself to be a Super Buyer Hunter. I probably need my own costume complete with mask and tights - I'm that super! ok - just kidding.

But - as a real estate auctioneer, we have a time crunch of usually 4 to 6 weeks to find any/every buyer/interested prospect of a particular property before the actual auction event. On average, we put 200 to 300 hours in each project. That time is spent hunting for buyers; turning over every last idea of where the buyer pools are and reaching them. Guerilla marketing helps - which includes the obvious print, direct mail, signage and a ton of internet exposure. But it also includes pounding the pavement in the community, organizations, associations, etc. Lots and lots of time on the phone answering questions, encouraging prospects to participate, convincing the buyers that we only work with motivated sellers who have invested in the auction process. 

It's that time again - gotta get my hat and buyer hunter gear on. Wish me luck.

Oh - I forgot to mention, the fact that I get to put up an "Auction" sign on the property with a DATE makes my job easeir and fun. After all, auctions are fun and exciting  - which would make great TV!  HGTV - you know where to reach me :)

Linda Mardi, President
AuctionFirst.com
Specializing in Real Estate Auctions

Did any of you catch the Early Show yesterday? Their financial guru Ray Martin talked about how more sellers are choosing auctions as way to sell their real estate.  I agree.  Even we can see some effect of this on ActiveRain - as there are now 91+ auctioneer members - which I'll toot my own horn that I was the first on ActiveRain and solicited Matt to add it as a category. I think we even beat out attorneys at this point.

In any event - auctions no longer = fire sale!  Auctions do equal motivated seller.  If you're a seller, get in touch with a real estate auctioneer to find out about the process. This link below is from the show.

Linda Mardi, President
AuctionFirst.com
Specializing in Real Estate Auctions

We accept referrals from agents/brokers too!

http://www.cbsnews.com/stories/2007/09/27/earlyshow/contributors/raymartin/main3304538.shtml

OK - I'm not trying to judge nor am I really looking to find out your religious affiliations.  However, have you noticed in the past 5-10 years how churches are being redefined.  I'm talking about the real estate aspect of course.  Churches have unique property needs, financial situations, and usually make decisions on a committee or congregational basis. There is constant transition within the church real estate industry - downsizing, upsizing.

When working with a church to sell their edifice and additional real estate holdings - there is a need to manage the timing of the sale of all the pieces at one time. If a church is upsizing - they really need to sell all holdings at once in order to (1) have the necessary funds to buy their next property and (2) they can't afford to sell out pieces a bit at a time.

Multi Par auctions present a perfect solution.  Multi par auctions allow the church to sell all of the pieces at one time - and to have the prospective bidders competing on price alone for the entire lot of all, one or any combination of the lots for sale. At the conclusion of the auction, the church has received the highest cumulative sales price on all lots, regardless of whether there are one or many sellers. Terms, including potential lease-back, are decided by the seller in advance of the auction.

We highly encourage churches to consider the accelerated marketing method of an auction. And if multiple lots are involved, a multi-par auction is an excellent way to maximize price and yet maintain control over the terms and timing.

Linda Mardi, President
AuctionFirst.com
Real Estate Auction Specialists - we know churches! And, we accept referrals from agents!

As a real estate auctioneer, it's not uncommon that many of the calls I get are from sellers whose properties have been on the market for some time - and the property has not yet sold.  The initial line of questions and answers is often similar.

How long as it been on the market?
Why hasn't it sold in your opinion?
What do you need to net from the sale?
What interests you about auction marketing?

Usually the bottom line is that the seller listed the property too high, missed the market at that time, and then over time the property became stale and the seller earned a reputation in the community of sales agents as being unreasonable and unrealistic in the price.  Whether that is true or not is unconsequential - because it's all a perception at that point.

Many times, more than less, sellers explain how the agent didn't market the property enough, agent listed it too high from the start, etc.....you get the picture.   I ask, "Did you interview your listing agent"? 'Yes, we interviewed several.'  And did you end up listing the property with the agent who suggested the highest list price? 'Well, yes."

So, sellers (it's human nature) will sometimes choose the agent who suggested the highest list price. There is seller skeptism in lower numbers and the possibility that the agent is just trying to encourage a low list price in order to get a fast pay day.  As time goes on, and still no sale, and subsequent price reductions - sometimes the sellers start to question the agent's effort to market the property.   But folks, this to me is plain and simple - why would an agent put $$$$ out of his/her own pocket to market a property when the seller has gone with a high list price and perhaps hasn't agreed to any reductions over time? Agents will not keep sinking money into a project when they feel the return is unlikely. It would be great if folks could have honest and open discussions at that time - to get onto the same page - and my hat's off to those real estate professionals that do. It's a tough discussion, but one that's needed as the down spiral starts occurring.

BTW - the auction process takes the list price completely out of the equation. don't list high, don't list low - because there's NO list price. Ok - that was a plug for auctions.

Back to the subject - So, what if you as a seller offered to fund your own marketing plan. Ask your agent to provide you with a marketing proposal along with costs. You might even request a good/better/best marketing plans that have $, $$, and $$$ associated. This request could be part of how you interview prospective agents.

Your agent's efforts for their time and expertise is compensated from the commission that you agree to pay - not from their ability or inability to fund a marketing campaign.  The commission then represents the true value that is placed on their time.

For agents, make sure that you have a value proposition to your sellers as to why you should earn the big bucks.  Just saying that you have a great past record and will market the heck out the property probably doesn't articulate a competitive edge. If your sellers agree to put in a thousand or several thousand dollars for marketing, then you'll need to make sure they understand the value of your time. In this way your expertise is truly valued as it should be.  There are less disagreements as to your effort and marketing initiatives. You become a tight team together for the same objective - to sell the property.  You will need to make your own ethical decisions as to how to deal with prospects that come in from the marketing money your seller provided and whether you shop those prospects to other properties or give an all out try to get them interested in the seller's property. 

Something new to think about....
Linda Mardi, President
www.AuctionFirst.com
Real Estate Auction Specialists

This is Part 2 of the blog I wrote yesterday - "Whaaat? Sellers pay for the marketing expenses?"

The seller may ask: "Why should I pay for the marketing expenses?  My agent has to take care of that. Afterall, that's why I'm paying the big commission." Very good question that allows an interesting discussion.

First, the real estate profession is service oriented. Conventionally, agents are paid a percentage of the sales price for their services. The marketing costs are absorbed by the agent and their broker.  My point made in yesterday's blog is that many sellers do not fully participate in understanding what expenses are being incurred by an agent/broker to market their property. For motivated sellers in a buyers' market - this means that you as a seller have an opportunity to take more control in the process - thru contributing to the marketing costs. This also means that agents will need to better articulate their value added service (this in part has lead to the discount and a la carte brokerage services - because agents cannot always convince sellers why the standard commission rate should apply - agents can't sell the value add). A la carte brokerage services to me just mean that the costs are broken out instead of all being tucked into one commission rate.  Why wouldn't a saavy seller want to have more insight into the process, effort and direct expenses towards his property.

Second, as a service oriented business - the commission represents a value for the agents time, knowledge expertise and skill set in the business.  It is possible to separate out three components to a commission: out of pocket expenses attributed to the listed property; a value for the agent's service; and lastly, risk management.  The expenses is objective. Sellers and their agents can devise a good/better/best marketing budget and plan, then decide which to implement and the associated costs. Value of the agent's services is discussed above. The third component is managing the risk. For the seller this means the risk of whether he will get the price he wants and how long it will take to sell - all critical pieces to conventional success. For the agent, it means the risk of not getting paid and not getting marketing expenses recovered. An honest and open discussion between the seller and agent will help to bring awareness to these underlying issues in the relationship, and ultimate goal of selling the property within a timeline and price point that meets the seller's objectives.

Look for Part 3 - aka List High?  Sellers fooling themselves? Agents with a self-serving business model?

Linda Mardi, President
www.AuctionFirst.com
Licensed Real Estate Auctioneer
Our speciality - simplifying the way America buys and sells properties

So here's the deal folks - especially true in a buyer's market.... You want to sell your property? You are motivated and have a genuine need to move on with your life?  Of course, we all know that you don't want to fire sale your property - and that you'd like to keep as much equity as possible.   So why wouldn't you demand more control in the marketing of your property. Do you really know what your agent is spending on marketing your property? Do you know whether your property is being used to 'shop' buyers into other properties?  If you have tried 'for sale by owner' then you know that there is a cost for marketing and advertising.  You had to decide whether to invest a little or heavily into the property's marketing.  My recommendation is that when sellers want to list conventionally, they be willing to invest cash into a sound marketing program of their property.  Come to an agreement with your agent on how the agent will execute the plan, how much of their own funds they will put in and/or match. After all, your selling agent's business is benefited from just having their sign in your yard. Be creative, think out of the box.

Of course, you can alternatively consider a real estate auction as the way to go. With this method, you have the most control possible - you control the marketing budget, you control the terms and conditions of the sale and you control the date when the property will sell.  What? You now ask about the price / how much the property will sell for?  Well my friend, that is up to the buyer, as usual, to tell you how much your property is worth.  Do you want to learn what the market value is sooner or later? With an auction, you'll learn the market value immediately at auction.

So, if you're challenged by selling a property in today's buyers market - consider funding a well thought out marketing campaign. And if you have a time value of money - consider selling your property thru an auction.

Linda Mardi
AuctionFirst.com
Licensed Real Estate Auctioneer

Sometimes it's the small things that we're involved in or are witness to that give us pause for thought and can be very gratifying. 

We recently had a very successful real estate auction.  The owner was motivated and had an urgent need to liquidate his real estate holdings.  Two small adjacent properties had been on the market for some time - unsold. The agent referred the owner to us to discuss an auction.  Under $50k - normally too small to warrant our labor intensive marketing services.  However, the owner's story was compelling.  His original intent was to build a church on the properties. The owner, a man who had helped many many people during his prosperous years, now found himself in need. His dear friends rallied for him with prayer and support groups. 

We agreed to take the listing to auction. No minimum and no reserve = scary terms for sellers. However as our seller would later tell us, after giving us giant bear hugs, that he had gotten on his knees in prayer the night before the auction and received overall peace about his future, including whatever results the auction would bring. Although originally destined to be a church property, he said he knew that God had another purpose and he was willing to let God's purpose unfold.

Well, the auction went very well. The buyer was very happy. And the seller was thrilled with the results - his immediate needs being met.  We were happy to be part of this small but meaningful event.

Remember the story about the Alaskan oil spills - and a man that was rescuing birds - extracting them from the oily water? One at a time, very slow, very labor intensive. Asked why he bothered because there were so many - his reply "but it made the world of difference to that One."

Have a useful and joyful day - think good things and have your thoughts add to the good side of the global thought-scale.

Linda Mardi, President
www.AuctionFirst.com
Licensed Real Estate Auctioneer

Name your own price at this live auction on 9/27/07.  No Minimum and No Reserve.  Property is 6.65 undeveloped acres 2 miles from downtown Austin TX in the Del Valle area near I-35/Hwy290.  Download a Bid Package from www.AuctionFirst.com/property.asp for property information along with auction registration/sale terms. Property is 0 Nuckols Crossing (at intersection with St Elmos Rd E).  This property will sell to the highest bidder on auction day. Don't miss your chance to pick up a great deal!  2% Broker participation available.

Want to learn more about selling your property at auction? Call us - real estate AUCTIONs are what we specialize in!

Linda Mardi - licensed real estate auctioneer
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AuctionFirst.com
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(800) 498-9428