Global Auction Blog

From The Better Homes and Gardens Real Estate Blog

Auctioning real estate, a sales method we most associate with foreclosures, is now being applied to move houses and condominiums not being repossessed by the lending institutions, as the demand for well-priced real estate continues. While some auctioneers say that such public sales will continue to be used for real estate even as the market improves, many developers and real estate specialists believe this trend is born of the times we’re in and will fade once the surplus housing stock does.

Real estate auctions have not only demonstrated an ability to sell, but they are strongly influencing the sale of properties in the online environment as well. In the face of the U.S. housing market concerns, more and more people, particularly out-of-state and foreign investors, are utilizing online auctions to purchase properties. However, one of the most telling signs that this trend could get bigger before it fades is its growing acceptance among traditional real estate brokers.

Implications for Residential Real Estate Companies

Over the past few years, auctioneers have noted strong growth in the number of first-time sellers. Today, the auction market for real estate has grown to $65 billion-plus in sales. According to a study done by the National Association of Realtors, the future of the real estate auction business may be heading toward one in every three properties being sold or influenced using an auction listing. If that’s the case, any brokers looking for new opportunities to generate additional revenues, might want to consider opening an auction division.

The auction method of marketing involves more than just making a sale. It involves orchestrating a business transaction and entering into a commitment to meet the needs of sellers, buyers and Realtors® alike. The object is for the outcome to be positive for all parties involved, so please consider the points that follow as they apply to your specific market area.

Benefits to Seller

• Buyers come prepared to buy

• Quick disposal reduces long-term carrying costs, including taxes & maintenance

• Assurance that property will be sold at or near true market value

• Exposes the property to a large number of pre-qualified prospects

• Accelerates the sale

• Creates competition among buyers - auction price may exceed the price of a negotiated sale

• Requires potential buyers to pre-qualify for financing

• The seller knows exactly when the property will sell

• Eliminates numerous and unscheduled showings

• Takes the seller out of the negotiation process

• Ensures an aggressive marketing program that increases interest and visibility

Benefits to Buyer

• Properties are usually purchased at fair market value through competitive bidding

• The buyer knows the seller is committed to sell

• In multi-property auctions, the buyer sees many offerings at a single event

• Buyers determine the purchase price

• Auctions eliminate long negotiation periods

• Auctions reduce time to purchase property

• Purchasing and closing dates are known

• Buyers know they are competing on the same terms as all other buyers

• Buyers receive comprehensive information on property via due diligence packet

Benefits to the REALTOR®

• Generates a list of ready, qualified buyers

• Offers clients and customers alternate selling and purchasing options

• Increases revenue and market share

• Develops an alternate market niche

• Assures property will be sold at or near current market value

• Property is sold within a relatively short period of time

• Exposes the property to many potential purchasers

• Auctions bring people in to look at all your listings, not just the auction listing

• Successful auctions result in referrals and return business

• Agents can earn commissions as referring agent/broker, cooperating agent/broker, or as the listing agent/broker

All of this being said, the idea of integrating the auction process into residential real estate transactions is compelling.  The introduction of auction services into a range of services would provide yet another avenue for buyers and sellers who seek some of the specific benefits cited above.  As real estate professionals consider which operational tools will help to differentiate them in future years, it could well be that auction services will become a mainstay.

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FOR IMMEDIATE RELEASE
FEBRUARY 11, 2008    CONTACT:
Ken A. Scott,  AAO, CPPA
Auctioneers Association Convention Co-Chair

ONTARIO AUCTIONEERS GATHER IN LONDON
FOR 25th ANNUAL CONVENTION, CONFERENCE & COMPETITION

LONDON, ON. – There will be some fast-talking in the Forest City during the weekend of February 19-22 when members of the Auctioneers Association of Ontario will gather in London for the 25th Annual Convention.  Most of the events will take place at the Delta London Armouries, but the feature event of the weekend, the Ontario Auctioneers Championship Competition will be conducted at the Gardner Galleries.

Krista Richards, President of the Auctioneers Association of Ontario, and her husband Shawn Gannaw, are hosts for the convention.  Grant Gardner and his wife  Liz are the hosts for  the auctioneers competition at their Hamilton Road auction facility.

The theme of the convention, “Changing with the Times”  was chosen to introduce
a variety of educational and professional development seminars, an auction trade fair and exhibition, a provincial auctioneer championship competition, and a variety of social and networking opportunities.  Nearly 100 auctioneers and their spouses are expected to attend the weekend program.  Three guest speakers will present seminars on various aspects of change in the auction industry.  Barb Richards from A Touch of Class Auctions, Barrie will speak on “Charity and Fundraising  Auctions”.  Barb is co-founder of the Canadian Auction College in Barrie, is a past president of the AAO.  Nan Hayes from Illinois is founder of MoveSeniors.com which is a resource website for seniors in transition.  Her topic is “Certified Relocation Transition Specialist”.  She provides training, workshops, small business development and education to senior living communities, realtors, moving companies and aging services providers nationwide.  Nicole Smallwood of Manitoba will speak on “Primer to Global Auction Guide”.  She has 10 years experience in internet marketing and will provide information on putting the auction bill on several sites from a single point and tips to help you get the most of your marketing on the internet.

The pinnacle of the weekend for many will be the Ontario Auctioneers Championship Competition that will take place on Saturday February 21st at the Gardner Galleries, commencing at 11:00 am.  As host of the competition, Gardner wants to make certain that conditions are just right for the 20 or more auctioneers who will sign up to compete in the experienced or novice divisions.  Gardner says, “The competitors take this event very seriously and it is important that they compete in front of a real auction audience and at a real auction event.  We will be having an estate and household consignment auction that day and the competitors will be able to demonstrate their skills by selling actual consignment items to actual buyers.  It will be a level playing field for the auctioneer competitors, and the audience will get to hear a variety of auction chants and selling styles.  The public, including all our regular auction goers, are welcome to attend this auction and competition.”

The auctioneers convention will conclude with a banquet on Saturday evening at which awards and honours are to be presented, and at which Krista Richards will hand over the President’s Gavel to incoming-President Len Metcalfe, of Metcalfe Auctions in Mildmay.

The Auctioneers Association of Ontario was founded in 1984.  It is the voice of all Auction professionals in the Province of Ontario and pursues excellence in the Auction industry through a combination of legislative programs, uniform standards of professional practice, professional development and a Code of Ethics, designed to ensure the highest quality of service to the public.

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