When it comes to real estate, conventional wisdom is that auction sales are just for desperate sellers or bank-owned properties. But in the past few years, auction platforms have seen a steady increase in the number of homes sold, and far more buyer engagement from owner-occupant consumers.

In fact, online real estate auction sales have increased approximately 25% year over year, according to the National Association of Realtors. They report that more home buyers and sellers are now looking at auctions as they would look at any other type of traditional real estate listing.

In Lancaster, PA, a region where live auctions have long been popular among Amish and Mennonite communities, auctioneer and real estate agents have also seen a renewed interest from the wider community. Ultimately, auctions can be a smart and efficient way of selling your home in a variety of markets, and it’s no surprise that both buyers and sellers are turning to this accelerated and targeted method.

Here are four reasons why selling via auction could be the right choice for you.

1. There’s no ceiling in a competitive market

There’s nothing quite like the buyer’s rush inspired by a bidding war, and in a strong seller’s market, the sky’s the limit.  Auctions create competition.  If you’re capturing the market at its height, an auction plays to people’s emotions. And people will often spend a lot more in an auction environment than they would in a negotiated sale.  Buyers in competitive markets, will sometimes turn to the auction method if they’ve had trouble purchasing through traditional real estate listings. Competitive markets increase the buyer bidding pool and increase buyers’ chances of paying more than they wanted.

2. Save time and money in a slow market

Auctions are not only for competitive markets. They can also be helpful in a downturn to sell a house quickly at true market value. In a slow market, it can be difficult to keep up with the trajectory of pricing. If the market is losing 5% value every month, and you’re only decreasing by 2% a month, you’re never going to catch up.  That’s how you end up with houses that linger on the market for five or 10 years — they just never caught up with pricing.  When auctioning a home, you can avoid that lag and ensure your home sells at its true value.

3. An auction attracts serious buyers

Auctions see their fair share of investors with plenty of capital, but lately, auctions capture bids from the everyday house hunter. About 20% of the buyers are owner-occupants, and just as serious about a purchase as the site’s repeat buyers, who are primarily investors.

They are usually trying to do one of two things: Get into a competitive market — which makes them a very serious buyer — or they’re trying to get a home that needs a bit of love or renovation.

To further ensure the auction draws only serious buyers, auction companies require users to undergo a prequalification process before they can bid. Just as holding an in-person auction, the highest bidder is required to provide 10% of the purchase price at the time of sale. This non-refundable deposit helps ensure the sale will go to settlement and weeds out less-serious buyers.

4. You know the exact date your home will sell

Holding on to a property can be costly. Selling your home via auction not only expedites the process because it only takes an average of 45 to 60 days from listing to closing, but the auction method also allows you to know the exact date of sale, so you can budget accordingly.

Sellers can avoid high carrying costs like mortgage payments, taxes, and home maintenance by budgeting for an exact sell-by date rather than listing a home the traditional way and hoping for the best.

Grab the Auction Opportunity

Across the country, real estate professionals are increasingly turning to the auction as a winning marketing tool. If you properly qualify your situation as a potential auction scenario (we’ll tell you how), you have an excellent chance at turning over a property quickly.

Auctions offer clients and customer’s new options, enhance your image as a full-service professional, expose the property to a wide market of potential buyers, and turn profits for your firm. Plenty of revenue-producing roles are available in the auction process. You don’t have to become an auctioneer to benefit. You can earn a fee as a referring agent/broker, a cooperating agent or a listing agent. However you participate, you’ll add one more marketing weapon to your reserves of professional techniques.

If you’re looking to sell (or purchase) property, an auction may be a good place to start. This rising trend for selling real estate isn’t only for foreclosures or fixer-uppers. In fact, the National Association of Realtors says this method carries a lot of benefits for sellers.

What is an auction, and how could it be a good method to quickly sell your real estate? Here’s a quick guide to help. 

The Benefits of Selling Your Property via Auction

“Going once, going twice…sold!” is the idea many of us have in our heads about auctions, but property auctions look a little different from what we see on our tv screens, and while it’s a straightforward process, there are some important steps and processes to prepare for.

 A property auction is just what it sounds like — your property is put up for sale, potential buyers make bids, and the highest bidder will take the lot. But what are the benefits for you as the seller?

• This is a great option for sellers who are looking to sell their property quickly
• No staging is necessary — your property will be sold as-is
• The buyer is responsible for their own inspection
• Eliminate long-term costs
• Allow your property to be viewed by people anywhere in the world (as many real estate auctions are online)
• You can set the time and date of the auction and make it work with your schedule
• Interact with committed buyers — no more losing time over people backing out of deals
• Get real market value

While auctions do have a bit of a competitive atmosphere, they generally benefit both buyer and seller when it comes to time, negotiations, and reaching a fair price.

So, how do you get started? First, you need to do some research on auctioneers. Many offer free consultations and can give you some expert insight on how to prep for your first auction. Some things you’ll want to consider when choosing an auctioneer are similar to what you’d look for in a realtor. Here are some questions to ask:

• Do they have a current state license?
• Can they provide references?
• Do they have an advertising plan?
• Will they see the sale through from beginning to end?
• How do they qualify bidders?

Additionally, ensure that the auctioneer is experienced in the kind of auction you need. There are many auctioneers that work with foreclosures or condos or farms. Each of these properties is unique and will need its own plan. Another thing to consider is if your auctioneer will require you to have a real estate agent — the good news is that many real estate auctioneers are agents themselves.

Real Estate Auctions Could Be Your Best Option

Although property auctions have been thought of in the marketplace as for distressed properties, times are changing! Most auctions today don’t come from foreclosure but from sellers who are looking for an accelerated and cost-effective way to sell their property.

Auctions don’t mean a bargain but instead can be a quick and optimal way to sell your land. We are here in your area and ready to get started!

WHY REAL ESTATE BROKERS ARE TURNING TO AUCTIONS

Have you ever wondered why real estate auctions seem more common these days?

From luxury homes to large commercial properties, auctions are frequently in the news, and with good reason. Most properties today readily pass the National Association of Realtor’s “Two-Thirds Rule,” which holds that, after an “analysis of the market, property and seller situation…if two of the three parts (market, seller, property) lean towards auction, then auction should be offered to the seller as a sales option.”

Brokers have an interest in auctions because they represent another way to assist buyers and sellers. Real estate licensees can participate as listing brokers, co-brokers, cooperating brokers or referral brokers, depending on the individual transaction and client preferences.

REASONS TO CHOOSE AN AUCTION

For brokers, an auction is simply another marketing tool, a way to get a property bought or sold. However, unlike other forms of marketing, auctions have a number of unique characteristics that make them especially attractive.

Simplicity: There was a time when real estate contracts were just a few pages in length. That’s no longer the case. Today, real estate agreements are lengthy documents filled with tiny type and covering just about every contingency that could possibly arise short of meteor strikes. Auctions bring back simplicity: Homes are sold without contingencies and settled within a few days.

Certainty: According to NAR, in January 2019, the typical existing home was on the market for 69 days before being sold, two days more than a year earlier.

For real estate professionals, more time on the market means increased marketing costs, greater seller dissatisfaction and delayed commission payments. With an auction, a property is scheduled for sale on a given date. If there’s no seller reserve, the property sells there and then, as is and without fanfare.

DOM strategies: An average days-on-the-market (DOM) figure can work both for and against buyers and sellers. A new listing may encourage interest at or near the listing price for a buyer who wants that particular property. A listing that lags on the market beyond the local DOM average is likely to see lesser offers because buyers may think “If the property is so great, how come it hasn’t already sold?”

With an auction, DOM questions are irrelevant. The property will be offered at a given time and date and likely sold within a few minutes. That’s it. For the seller, an auction means not worrying about a lengthy marketing process, while for buyers interpreting DOM figures is replaced by visible bids in real time.

Transparency: One of the most difficult situations in real estate is a property sale with multiple bids. No traditional buyer wants their offer revealed and no purchaser wants to bid more than they should. With an auction, multiple bids are a way of life: All bids are open and visible, so the marketing process creates a level playing field for everyone. A prospective purchaser can bid or not bid with a clear understanding of the property’s demand. Rumor and intimations are out, and claims that “another buyer may be interested” have no meaning when a buyer can readily see and evaluate a solid bid with money on the table.

Luxury homes: Homes in the upper price brackets have always represented unique problems for real estate brokers. As home values rise, the pool of potential buyers becomes smaller, simply because fewer people can afford big-ticket properties. With an auction, the availability of a property is open to all prospective buyers, including some from the Auction.com database that the brokerage community may not have known about.

Fair housing: In recent years, there’s been an increase in the use of “pocket listings” and “coming soon” listings. These are listings accepted by an MLS-member broker but not immediately placed on the system. As an example, a broker might acquire a listing and then sell the property directly or share it with a small group of other brokers, practices that may raise significant fair-housing issues.

According to Elizabeth Miller-Gadabouts, senior counsel to the California Association of Realtors, “If agents limit their listing exposure to only certain sectors of the market, it may have an alleged discriminatory effect, i.e. reinforcing segregated housing patterns, even when there is no intent to discriminate.”

With an auction, everyone gets the same chance to bid, at the same time, and with the same disclosures. Marketplace exposure is expansive, not restricted, and all are welcome. With public announcements and widespread promotion, there are no pocket listings when a home is sold through an auction.

A NEW NICHE FOR BROKERS

If brokers can specialize in such areas as neighborhoods, condo projects, HOAs, farms, commercial properties and office leasing, then why not in auctions? After all, at this point, auctions are a growing factor in the real estate marketplace, yet not often a broker specialty.

Looking toward the future, it’s clear that more and more brokers will want to increase their knowledge about and participation in auctions for the very simple reason that auction activity is growing. For instance, Auction.com recorded approximately 35,000 transactions in 2013, a number that grew to almost 50,000 in 2014. Meanwhile, during the period when auction activity was soaring, existing-home sales actually declined 3.1% in 2014, according to NAR.

For brokers, the conclusion is obvious: If auctions represent more business opportunities, then why would anyone look the other way?

How to Get Involved In Auctions

There are several ways to get involved in real estate auctions:

• Agents/brokers refer clients or customers
• Be a cooperative agent/broker
• Be a listing agent/broker (co-broker)

OPTION A: Agents/Brokers can refer clients or customers

A real estate agent or broker can refer a seller to an auction company and receive a referral fee. The referring agent or broker may also be instrumental in convincing the seller of the merits of auction.

Responsibilities of Referring Agent/Broker:

• Help seller analyze his needs, the property, and market to determine if a good auction situation exists.
• Refer seller to professional real estate Auction Company.
• If a negotiated sale listing agreement exists, cancel the previous listing to be superseded by an auction contract.
• Send notice to MLS stating that the property will be sold at public auction.
• Collect a referral fee from our auction company when the property closes.

Types of Agreements Used in This Situation

• Auction contract to supersede listing agreement

OPTION B: Be a Cooperative Agent/Broker

A cooperating (selling) agent is any agent/broker who sells a property. He may be the:

• Subagent
• Buyer’s agent
• Dual agent

A cooperating agent or broker registers a buyer who purchases property offered through an auction and earns a commission established by the auction firm. This agent or broker accompanies the bidder to pre-auction events and the auction, registers him to bid, and receives a portion of the commission.

Responsibilities of Cooperating Agent/Broker:

Before the Auction

• Call auction companies to be placed on their mailing lists.
• Attend real estate auctions to learn how they work.
• Advertise as an agent/broker who is knowledgeable about auctions to obtain prospects.
• Attend pre-auction open houses with prospects.
• Help prospects determine the market value of the property prior to sale (check comparables, property indebtedness, title, lien and market conditions, and read the due diligence or bidders packet).
• Learn the rules necessary to earn a commission for registering a successful buyer.
• Learn the terms of the auction.
• Register bidder prior to the auction pursuant to the auction firm’s requirements.
• Assist bidder with auction strategy.

During the Auction

• Attend the auction with prospects.
• Help them register.
• Assist prospect with bidding strategy.
• Accompany successful bidder to contract room.

After the Auction

• Collect commission check when property closes (usually handled by title or escrow company).

Types of Agreements Used in This Situation

• Buyer registration at open houses
• Broker registration for prospect representation

OPTION C: You can be a Listing Agent/Broker (Co-Broker)

A listing agent/broker is an agent of the seller who markets the seller’s property and represents the seller during the sale and at the closing. In a sale by auction, the listing agent/broker manages many traditional real estate functions and shares the commission based on the amount of involvement and the relationship defined by the parties involved. This relationship is beneficial for auctioneer and agent when services by a local auction or real estate company are needed or when an agent identifies a potential auction situation for a seller and the agent is not an auctioneer.

Responsibilities of Listing Agent/Broker

Before the Auction

• Provide the lead (in most cases).
• If a negotiated sale listing agreement exists, cancel the previous listing to be superseded by an auction contract.
• Send notice to MLS stating that the property will be sold at public auction.
• Provide a fact sheet on the property.
• Perform market analysis.
• Provide local licensing information.
• Complete due diligence.
• Order and obtain sign, photographs, and keys.
• Obtain bids for maintenance and supervise property management.
• Hold open houses for inspection.
• Assist bidders with pre-qualification process.
• Provide feedback (progress reports) to the seller.

During the Auction

• Assist auctioneer in bid process as needed.
• Accompany buyer to contract signing room.

After the Auction

• Help buyers with post-auction inspections, insurance, financing, etc.
• Assist in pre-closing events.
• Attend closing.
• Collect commission check when the property closes.

Types of Agreements Used in This Situation

• Listing agreement between the broker, auction company, and seller
• Auction contract to supersede listing agreement
• Pre-auction sales contracts and addendum
• Prospect registration forms

THE RISE OF REAL ESTATE AUCTIONS: WHY THEY’RE BECOMING MORE POPULAR THAN EVER

Real Estate auctions have been gaining popularity in recent years, and it’s easy to see why. With the convenience and speed of online bidding, combined with the transparency of the auction process, more and more people are turning to auctions as a way to buy and sell property. Whether you’re a seasoned investor or a first-time homebuyer, there are many reasons why a real estate auction might be the right choice for you.

If you’re looking to find local property auctions, there are a few options available to you. One of the best places to start is with a local auctioneer. These professionals are knowledgeable about the local market and can provide valuable information about upcoming auctions in your area. If you’re not sure where to find an auctioneer, a quick internet search or a call to your local real estate office should get you started.

Another option is to search for real estate auctions online. There are many websites that specialize in auction listings, and these can be a great resource for finding upcoming auctions near you. Always check jenkinsrealestateauctions.com for all upcoming auction events.  When choosing a website, it’s important to consider factors like the number of listings, the type of properties available, and the user experience.

So, how do you buy a house at auction? The process can vary depending on the type of auction, but here are some general steps to follow:

1. Research the property: Before bidding on a property, it’s important to research the property and understand what you’re bidding on. This might include looking at photos, reading descriptions, and researching the property’s location and value.
2. Register to bid: To participate in an auction, you’ll need to register to bid. This typically involves providing basic information and a valid form of payment.
3. Place your bid: When the auction begins, you can start bidding on the property. This can be done in person, online, or by phone.
4. Win the auction: If you’re the highest bidder at the end of the auction, you’ll win the property.

It’s important to remember that when you buy a property at auction, you’re typically buying it “as-is.” This means that you’ll be responsible for any repairs or improvements needed. Additionally, you’ll typically need to pay a deposit and close on the property within a short timeframe, usually within 30 to 60 days.

As with any real estate transaction, it’s important to work with a professional when buying or selling property at auction. A Realtor or broker can provide valuable guidance and help ensure that you get the best possible outcome. If you’re looking to buy a property in Realty & Auction, Jenkins Real Estate Auctions LLC is here to help. With years of experience and a commitment to fair market value, we’re the trusted choice for real estate auctions in the over 30 U.S. States

.

In conclusion, real estate auctions are a valuable option for buying and selling property. With the rise of online bidding, it’s easier than ever to participate in an auction and find the property of your dreams. Whether you’re a seasoned investor or a first-time homebuyer, there are many reasons why a real estate auction might be the right choice for you. So why not explore your options and see what’s available today?

Buyers May Benefit From an Auction Mindset

Buyers who head into the housing market believing they should get a home for less than the listing price may be very disappointed. Instead, they may consider that asking prices have become more like the start of an auction and be ready to start bidding.

For every listing, there is an average of 5.1 offers, according to the National Association of REALTORS®. What’s more, half of homes are being sold above list price.

Additionally, “Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home,” an article at Keeping Current Matters notes.

In actual auctions, many sellers often set a reserve price, which is the minimum amount a seller will accept. In today’s market frenzy, the list price for a house for sale may be more like that reserve price,, the article says. The asking price has become the starting point of the negotiation in many home sales today.

About 40% of potential buyers who were searching for a home this spring say they haven’t bought yet because they keep getting outbid, according to a survey from the National Association of Home Builders.

Knowing they have the upper hand, sellers have come to expect a bidding war for their home. Twenty-four percent of homeowners recently surveyed say they expect to get more than their asking price, and 29% of sellers plan to ask for more than what they think their home is worth, according to a survey of 657 homeowners conducted by realtor.com®.

Some buyers are going to extremes to win a home they want. Real estate pros report individual listings fetching as many as 20 offers—one even got 97 bids—as the home buying frenzy continues. To win a bidding war, buyers may be willing to waive contingencies and stretch their budgets to the absolute max. Some buyers have even offered $100,000 above asking price, Debbie Barrera, a broker at Realty Austin in Austin, Texas, told The Wall Street Journal. She even had a buyer offer $500,000 above asking price for a home with a pool.

Selling at Auction

Jenkins Real Estate Auctions follows a much more strategic approach to marketing to quickly get the attention of the people who are most likely to buy your property. We apply our marketing expertise and utilize the most advanced and scientific market segmentation principles, we determine the exact target market for your property and leverage our extensive database of buyers to deliver your sales message to the right buyers.  Our marketing campaigns feature a mix of marketing communication including signage, newspaper, direct mail, email, video, virtual tours and public relations. We also drive awareness through geographically targeted keywords and banner campaigns, search engine marketing, personalized email, third-party websites, and social media postings. 

What Can Selling at Auction Do For You?

• Take Control of the Sale: Whether you are selling a house, farm, investment or commercial property, you control the day it will be sold. You know how the property will be marketed. You know the time and date of the inspections. You take control of your sale, at your terms and move on with your life in 30-45 days.
• Stress Free: Hiring Jenkins Real Estate Auctions will take the stress out of the real estate sale. There’s no waiting, no haggling, and no buyer contingencies since properties sold at auction sell “as is, where is”, which means a hassle-free selling experience for our clients.
• Proven Results: Our results are impressive – More than 93% of our auctions enjoy competitive bidding and we have a 98% closing rate. We understand what it takes to motivate interested buyers to do their homework and show up on auction day ready to bid their highest and best offer.
• A Plan That’s Right for You: Jenkins Real Estate Auctions will provide you with a customized marketing plan to meet your personal needs and goals. Your dedicated Sales Associate will answer any questions you may have and help you decide which option is right for you

As the market evolves, so do the innovative approaches available to sellers. Real estate auctions stand out as a method that delivers results, harnessing the power of competition, marketing exposure, and efficient timelines to maximize returns and enhance seller satisfaction.

Embrace the possibilities of real estate auctions and explore the potential they hold for your property sale. If you’re ready to enjoy the benefits of a real estate auction, Jenkins Real Estate Auctions LLC is here to guide you through the process and help you achieve your property selling goals.

Contact Terry Jenkins at Century 21 Select Real Estate –Realtor® / Jenkins Real Estate Auctions LLC – to learn more about a new home selling and marketing program.

Century 21™ Select Real Estate – Folsom Office

Terry Jenkins – REALTOR® – DRE# 02096855

CREA – Certified Real Estate Auctioneer®

Jenkins Real Estate Auctions LLC – A California Company

Entity No. 202358616912

Registered: State of California – Secretary of State

Surety Bond Auctioneer/Auction Company – Bond# 387770D

REO Agent – Distressed Property Expert

Text: (916) 588-0067

Disclaimer: This material is provided for information purposes only and is not to be construed as financial, investment or tax advice. Readers are strongly advised to consult with their professional advisors regarding the information herein.