Auction Advantage

Auction Advantage

There are times when real estate is an unwanted burden - for the developer, the lender, a major corporation, or any other kind of owner. Disposing of unwanted real estate means no more interest payments, property taxes, insurance and maintenance costs. These carrying costs are unlikely to be recouped and can eat up to 25% or more of a property's value. In such situations, the real estate auction offers an attractive alternative to sellers for a variety of reasons.

Auctions provide instant liquidity, by transforming surplus holdings into cash or earnings assets.

Auctions bring quick sales by making the auction a catalyst for motivating hesitant buyers into action. A typical auction marketing period of 60 days or less brings the property to the attention of all potential buyers, telling them the exact day of the sale. Timing can be critical if a transaction is driven by specific tax or financing requirements, such as year-end closings of companies or financial institutions that want to offset year-end gains and losses. Auction sales can often be closed instantly or within an acceptable time frame, depending on the sellers' requirements and flexibility.

Auctions establish value because they have the potential to generate higher prices than conventional sales in both individual and bulk sales settings. In weak markets, the auction creates the market and maximizes prices by creating consumer confidence in the property. In strong markets, it establishes new highs by capitalizing on existing demand and extracting every dollar the market will bear.

Auctions expand market reach; where efforts to sell similar real estate get the attention of a limited audience, the marketing programs that support an auction can expose properties to a regional, national and international audience.

Auctions freeze conventional activity particularly in an over-built market where everyone waits to see what opportunities the auction might bring. Once the auction marketing program begins, sales on competitive properties in the area are virtually eliminated.

Auctions get attention sellers who opt for inclusion in multiple-owner, multiple-property auctions receive far more exposure for their properties than individual advertising contributions would buy.

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