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Five Distinct Advantages of Selling Real Estate at Auction
You get immediate action.
People who have shown interest in your property will realize that if they want it they must commit themselves to purchase it at a definite time and place.
It focuses the attention of all prospective purchasers upon your property and they are put on notice that the property will sell to the highest bidder at a specific time and place.
The Auction method is one way of bringing about such sales. This is done in a manner where there can be no criticism as to the price obtained. Courts, trustees, and businessmen have held that a well advertised and well-attended Auction will determine a fair market value over all other methods.
It’s the only way to sell with a good possibility of obtaining a higher price than the original asking price.
AUCTION ADVANTAGES – Seller Benefits
- Offers the seller another option
- Creates competition among buyers – Auction prices can exceed the price of a negotiated sale.
- An Auction generates excitement and heightens buyer interest.
- Requires that potential buyers pre-qualify for loans.
- Exposes the property to a large number of pre-qualified buyers.
- Accelerates sales – the property can sometimes be sold within weeks of listing.
- Eliminates high seller carrying costs such as mortgage interest, taxes, maintenance
insurance, utilities, upkeep and deferred depreciation.
- Auctions bring interested buyers to a point of decision – they must act now or lose the opportunity to purchase.
- An auction is a true market forum – the highest bidder pays the lowest price a seller will accept.
- The seller knows exactly when the property will sell.
- The seller sets the terms/conditions of the sale, maintains control of the property through the
- Auction (depending on the Auction type) and actively participates in the process.
- Auctions can greatly reduce the time the property is on the market.
- Auctions eliminate numerous and unscheduled showings.
- Auctions take the seller out of the negotiation process.
- Seller is able to rapidly obtain liquidity.
- Seller is able to free up capital and move on to other investments.
- The auction provides “proactive” rather than “reactive” marketing.
Steps to Buy Real Estate at an Auction
View the property:
If you are interested in the property, set up a showing with the Real Estate/Auction Company or attend an open house to find out if this is the right property for you. If it is make sure you are ready day of auction because when a property is sold through auction, it is considered an “As Is” Sale. This means the sale will occur with no contingencies or negotiations.
Financing must be pre-arranged either having cash or by your Bank or mortgage company. If they require an appraisal, this must be done before the day of the auction.
When a property is sold through auction, it is considered an “As Is” Sale. Seller will not guarantee, warranty as to the condition of the property. If Buyer has any question or concerns about the property it would be the Buyers responsibility to do any inspections, testing or searches they wish to do prior to the Auction to satisfy Buyers only. Any cost incurred for these services would be Buyers responsibility. Buyer must get permission from Seller and Real estate/Auction Company prior to doing any inspections or testing on the property and notice must be given before entering the property.
The successful bidder will be required to pay NON-REFUNDABLE Earnest Money in the amount of 10% of the final purchase price. This will be held in Judd Realty LLC’s Trust Account and apply to purchase price at closing which will be approximately 30 days from acceptance, if this offer does not close due to the Buyers inability to perform in 30 days, then the Earnest Money will be dispersed to the Seller.
Check the terms of the Auction, Sellers may add a Buyer’s fee to the final bid to determine the total purchase price
Day of Auction:
The property will be sold in the manner resulting in the highest total sale price, the Seller has the right to accept or counter within 48 hours. The successful bidder will be required to sign a standard Offer to Purchase with no contingencies, Broker Disclosure to Customer and an Addendum S- Lead Based Paint Disclosure immediately following the auction.
Closing should take place 30 days or earlier after the auction, all Real Estate Taxes, garbage, fuel when applied, will be prorated as of date of closing. Seller will provide Title Insurance and a Deed.
WAA Members Adhere to a Strict Code of Ethics
PART I — Professional Relations
Article 1. In the best interest of the public, of fellow auctioneers and the auctioneer’s own business, the auctioneer shall be loyal to the Corporation.
Article 2. The auctioneer shall conduct business so as to avoid disputes with fellow auctioneers, but in the event of a controversy between tow member auctioneers, they should not resort to lawsuit but submit the difference to arbitration of the Corporations Board of Directors, hereinafter called the Board; and the decision of such arbitration shall be accepted as final and binding. If the dispute should be with a nonmember, the auctioneer shall offer the services of the Board to arbitrate.
Article 3. If a member is charged with unethical practice, such member shall promptly and voluntarily place all the pertinent facts before the Board, or a committee so designated, for investigation and report.
Article 4. A member shall never publicly criticize a competitor, and when an opinion is specifically requested, it shall be rendered in conformity with strict professional courtesy and dignity.
Article 5. A member shall not solicit the services of an employee of a fellow auctioneer without prior knowledge and consent of the fellow Auctioneer.
Article 6. In the best interest of society, of the Auctioneer’s associates and business, the auctioneer shall at all times be loyal to the Corporation and active in its work; and should willingly share with fellow members the lessons of experience.
PART II — Relationship to Clients
Article 7. In justice to those who place their interests in the auctioneer’s hands, the auctioneer should endeavor to keep abreast of business conditions, to keep informed in matters of law and proposed legislation affection such interests, so as to give intelligent business advice and effective service.
Article 8. In accepting the sale of real or personal property, the member pledges to be fair to both seller and buyer, and to protect the owner’s interest as if it were the auctioneer’s own.
Article 9. When consulted for an appraisal of value or liquidation problem, a member shall give a well-considered opinion, reflecting expert knowledge and sound judgment, taking requisite time for study, inquiry and deliberation. The counsel of the member represents a professional service which should be rendered in writing and for which a reasonable charge should be made. A member shall not undertake to give an appraisal or offer an opinion on any proposition on which there is a direct or indirect interest, without a full disclosure of such interest.
Article 10. Before accepting a sale, it is the duty of the auctioneer to advise the owner intelligently and honestly regarding the market value of the business or proposition and the reasonable chance of sale at value or above.
PART III — Relationship to the Public
Article 11. It is the duty of every member to protect the public against fraud, misrepresentation or unethical practices in connection with the sale disposition or liquidation of any real or personal property the auctioneer is called upon to dispose of at public auction.
Article 12. It is the duty of a member to ascertain all pertinent facts concerning every sale for which the member is engaged, so that in offering, the member may avoid error, exaggeration and misrepresentation.
Article 13. An auctioneer is a confidential trustee of the information given by the seller or gained through their relationship; and the auctioneer must never disclose the gross receipts of a sale or any other information that would tend to be a violation of the profession.
Article 14. No special conditions, real or assumed, or inducements or directions from anyone relieve the member from responsibility to strictly observe this Code of Ethics in letter and spirit.