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The Realtor's Role at Auction


real estate auciton and the role of real estate agentWhile real estate auctions are considered an efficient way to sell non distressed properties in Australia and Japan, the United States and Canada have always regarded auctions as a way to sell distressed properties. However, today, an increasing number of realtors and brokers are realizing that auctions are actually a viable way of buying and selling property.

What is the Realtor’s Role in Auctions?
 Within the real estate industry, it is a common misconception that auctions are bad for business. Realtors, in particular, have a difficult time determining what role they will play in a real estate auction. However, the truth is that auctions often prove to be an excellent way to make a sale, as well as a healthy commission. 

There are three roles an agent/ broker can have in an auction that will result in a commission. They include:

Referring Agent/ Broker
You can earn a referral fee simply for referring a seller to an auction house. So, if you have a property that has been on the market for quite some time with no results, an auction may be the best way to finally see the property sell. Plus, the referral fee will be more than you would earn by simply letting the home sit on the market for an extended period of time.

Cooperating Agent/ Broker
A cooperating (selling) agent/ broker is a person that sells the property, either as a buyer’s agent, subagent, or dual agent. Cooperating agents earn a commission that is determined by the auction house when you register the buyer who purchases the property at auction.                  

Listing Agent/ Broker (Co Broker)
If you have a desire to be significantly involved in the auction process, you may want to take on the role of listing agent/ broker. This individual acts as the seller’s agent. As such, they market the seller’s property at the auction, while also representing the seller throughout the sale and closing. This role requires the individual to fulfill many of the traditional real estate agent functions. The amount of commission earned is determined by the work done, as well as the agreement between the auctioneer and the listing agent/ broker. If you decide this role is perfect for you, be aware that you can increase the amount of commission you earn by taking on additional responsibilities as you become more familiar with the auction process.

If you are working with a seller, there are several factors to consider when deciding if an auction is the most effective way of selling their property. Look at these 3 things:
  • The market
  • The seller
  • The property
If at least 2 of the 3 variables points toward auction, then it would be a good idea for the seller to consider an auction for selling their property.
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