Bad publicity is something that growing Industries cannot avoid. One of the things that is harmful is when a so called real estate expert gives advice. I recently ran across a question and the real estate brokers response In a real estate journal. The question was “Should we sell our home at auction.”

Question:  Our home was appraised for $190,000 we want to sell and move to a smaller place that we will buy if we can get our home sold fast. We have noticed that more and more real estate is being sold at auction. What is the best way to sell?

Answer:  Selling your home at public auction is not a good idea. Buyers at auctions are bargain hunters attracted because auctions are distress sales and most properties are purchased for less than market value. This is not true...

What happened here is that the seller went to a conventional real estate broker for an opinion. Of the hundreds of thousands of real estate agents and brokers in this county and Canada, by far the majority of these people know little or nothing about real estate auction marketing.

The broker was quoted as saying most buyers at auction are bargain hunters. The broker needs to be educated that the property could be the subject of a marketing effort that is on more of a professional level than conventional, private, one on one selling and one that has been proven to be a better way of selling real estate. Maybe we should ask the broker how many of their listings are actually sold, or better yet, sold in 30 days. To keep the broker honest check the figures reported by the multiple listing service. The MLS can provide information on the ratio of sales to listings. Brokers in some areas are happy to report that 3 out of 10 properties listed are actually sold. Many real estate/auctioneer firms report 8 out of 10 sold.

This business of saying most properties at auction are purchased for less than market value is really off the wall. In my 30 years as a real estate broker, it is buyers that determine value, not sellers. True market value is what someone is willing to pay (the person that writes the check) and that my friend is the only true market there is.

Traditional, Conventional, Private Treaty or whatever you want to call it, in my opinion is a terribly inefficient method of selling real estate, it is based on negative haggling.

Here are some benefits of real estate auction marketing to a seller:

1.   Avoids listing price conflict. No false price. i.e., let’s add on the commission plus $10,000 and try for  $225,000.  No need to work out asking price.

2.   MLS System is clogged up. Hard to catch purchasers’ attention. Today’s listing sells yesterday’s listing. Price reductions are based on the duration of time on MLS.

3.   Auctions do not limit price. It is an increasing price as opposed to a decreasing price. Auctions freeze the market and eliminate the need for the seller to be the cheapest in order to sell.

4.   There is a definite date of sale. Marketing time is restricted to force buyers to act. Buyers do not know what sellers will sell for. Buyers also don’t know what other buyers are or might be willing to pay.

5.   Negotiations are in the seller's favor as pressure is focused on buyers. No counter offers from seller. Any offer is returned unchanged and unaccepted. Buyer is still guessing.

6.   Seller will receive unconditional cash purchase agreement with substantial non-refundable earnest money deposit. No more contingencies subject to financing, selling another property, etc. Purchaser accepts property on as is basis.

7.   Buyers at Real Estate Auctions go to "buy" not to look at a property. They are disappointed when they are outbid.

8.   Real Estate Auctions save time. Four week marketing campaign with three 1-hour inspection periods. No interim private showings. Important that buyers encounter other people interested in the property.

9.   Concentrated marketing program focuses attention on the property being sold, not on the Real Estate Company or salesperson.

10. Seller knows marketing schedule and approves and pays for marketing plan. Highly organized. Seller not sitting around wondering/if/when someone may come and view the property. No more unexpected, inconvenient requests to show property with one clean up after another. (Can’t show it today, the house is a mess)

11. Real Estate Auction Marketing is on purpose marketing as opposed to list and forget MLS approach relying on other realtors to show and sell.

My experience is that many auctioneers are afraid to tackle a real estate auction because their education stopped the day they graduated from auction school.

Do not let your education end — the world is moving too fast and it is a lot of fun to move with it. Maybe it is time that you take a course that will teach you some new auctioneer and Real Estate skills.