Author: Stephen J. Martin & Thomas E. Battle
Now that you have a basic understanding of the types of auctions that can be used to sell real estate, let's look at when you might use accelerated marketing: marketing method of real estate auction.
The accelerated method of marketing is not right for every situation or Real Estate. The auction method may be ideal for a highly desirable Real Estate with significant market potential. Such properties typically generate a number of potential buyers by any means, but a well-organized accelerated marketing program can generate significant market results in a short period of time. In situations where the Real Estate to be sold has strong market recognition, the auction method will attract the largest number of bidders who, because they know they have to make their decision on a given day, will attend and bid on the Real Estate. For example, some real estate developers have come to the realization that they can sell entire subdivisions on the very first day they are offered to the public, rather than utilizing a lottery for interested parties to "win" the opportunity to pay the asking price for the lots or models being sold.
The market determines the price and properties that are interesting to the market will bring top prices.
This is especially true of trophy properties which are significant homes, ranches and farms. These properties deserve special handling from a marketing standpoint and are frequently sold utilizing accelerated marketing tools. By focusing the market attention on a trophy Real Estate for a short specific period of time, the excitement in the market for acquisition of the Real Estate can be increased and will attract buyers that may not have considered the Real Estate previously.
Second are special-built facilities such as schools, post offices, etc. Properties of this type are usually hard to market utilizing the negotiated sale method. Many times the accelerated marketing professional, utilizing a target marketing plan, can facilitate the sale of these properties in a timely manner. Providing the seller with reduced carrying costs by marketing the Real Estate quickly, is the prime reason for selling special built properties at auction. While not the easiest to market, school buildings, post offices and industrial buildings can be sold at auction after a concentrated marketing campaign.
The third type of Real Estate situation, which is frequently suitable for accelerated marketing, is agricultural Real Estate . For many years, the auction method of marketing has been the main form of marketing farms, ranches and orchards. The accelerated method of marketing can usually accomplish this in as little as 60 days from the signing of the marketing agreement to the date of closing. Obviously, this can be a major advantage for the seller who wishes to sell such a Real Estate prior to the next planting season. Playing off this seasonal contingency provides the opportunity for land in transition to be sold utilizing the accelerated marketing approach.
The fourth situation which lends itself to accelerated marketing involves the sale of both real and personal Real Estate . Situations involving closed industrial plants or commercial facilities with equipment, furniture and fixtures to sell can work very well in accelerated marketing. In this situation, marketing the real property and the personal Real Estate together at auction makes a great deal of sense, but only by utilizing professionals who have experience in selling the type of personal Real Estate involved. The amount of exposure that the accelerated marketing campaign can provide both types of Real E atewill increase the likelihood of a good overall return to the seller. In addition, the ultimate buyer may have a need for both the equipment and the facility if there is an interest in operating the facility as an on-going business. Usually this will be determined before the marketing plan is implemented so that the Real Estate can be offered as a going concern.
Perhaps one of the biggest opportunities for most traditional residential real estate companies is in understanding the need for some clients to reallocate personal assets as well as real estate.
The combined sale of real and personal Real Estate at auction can occur in many residential situations. For example, an attorney representing an estate will need to sell the total assets of the client. A public auction of the home and its contents can provide an economical and speedy solution to the reallocation of assets involved. It also provides a public record of what happened to the assets, the price paid and proof that there was competitive bidding for the goods sold.
Today, there is an opportunity for "full service" real estate companies to be offering even more services. By bringing the services of traditional personal Real Estate auctioneers to the market they will be providing the services their clients need, while creating an opportunity for even more real estate sales. It is worth noting that firms that do this also help new first time buyers find inexpensive appliances and furnishings for their new homes at the same time.
Auctions are also ideal for situations requiring the public reallocation of assets. Many times a board or court ordered situation either requires or recommends the use of the accelerated method to assure the openness of the transaction. A properly promoted public auction assures those involved that the transaction has been conducted in an open manner with all parties treated equally.