Frequently Asked Questions about Real Estate Auctions
Why should I sell my real estate by auction method?
The auction method is the best way to determine market value. It is a competitive bidding process to determine the final selling price than using traditional financing and real estate closing methods.
Our consistent results-driven team of real estate professionals, marketing experts, and licensed auctioneers has more than 20 years of experience. We believe that using competitive bidding and complete transparency best achieves the sellers’ goals along with a happy winning buyer.
What situations warrant using the auction method for selling real estate?
When your objectives are to sell the property on your ideal time frame (quick sale or otherwise) and truly see what the market will bear, using transparent terms and conditions set by the seller, coupled with an intense marketing saturation of your property – including the MLS listing, the auction method is the way to do this.
Is the auction method ever used as a first selling method?
Yes, the auction method is not only the best but should be the first choice. An auction does not create the price ceiling that a conventional listing does. The seller can set the conditions for the sale and eliminate endless costly negotiations.
Are real estate auctions only for distressed properties?
No, most of our auctions do not result from repossessed properties but are the result of the smart seller. A smart seller chooses the cost-effective, accelerated method of selling property at auction, rather than listing the property for an undetermined length of time. Usually, listings require long-term marketing periods with multiple unscheduled, showings and creative, contingency offers. The auction method sets the date the property will sell and eliminates these hassles.
Can I set a “minimum” on my property? I don’t want to give it away!
Yes, the seller has the right to execute a reserve or minimum bid. This figure is discussed with the auction professional during early negotiations of the contract and is not disclosed to any potential buyer, under any circumstances. The seller has the right to accept or decline the highest bid if it falls below the established reserve price. Our goal is always to exceed your minimum price.
If the high bid is less than my predetermined minimum value, can I accept it?
Yes, the seller always has the right to sell the property at the highest bid price they are comfortable with.
How long will the entire process take?
To allow our intense marketing saturation process to attract the most bidders, ideally, the contract must be signed at least 3-4 weeks prior to the auction day, the closing takes place approximately 30 days after the auction date. Quick sale options are also available.
Where will the auction take place?
The auction typically takes place on-site on single properties, either in a tent, on the front porch, or in the living room. For multi-property or vacant land auctions a ballroom setting is typically more appropriate for the auction setting.
How long after the auction occurs will I get paid?
Approximately 30 days after the auction, a closing date will be set. At that time, the property owner will be paid and turnover possession to the buyer. The closing will be insured by a professional title company.
What factors determine the success at an auction?
Many factors contribute to a successful auction, the desirability of the property being sold i.e., location, condition, and surrounding properties. Secondly, and most important, realistic expectations on the part of the seller. Every property has a value, when a property is properly advertised and promoted, and two or more approved bidders are in attendance the high bid achieved is true market value. If the seller realizes this and is truly motivated to sell at the achieved price under stated terms and conditions a successful auction occurs.
What are the terms of an auction?
The terms and conditions are devised to protect the seller and the process of the auction method. Properties are sold “as is, where is” with all faults. The purchase agreement is produced with no contingencies, including those for inspections and financing. Often, we provide a complete property inspection, in advance, so all property conditions are clearly shared with bidders.
Can I sell my property a more traditional way with Blue Box Auction Gallery?
Absolutely! Blue Box Auction Gallery is a licensed full-service auction house but can also sell your property using the traditional method, if that is what you choose.
Regardless of auction or traditional method, we will list your property in the Multiple Listing Service (MLS). So, whether you choose the auction or a traditional real estate sale method, your property will be professionally marketed and will be listed on our website as well as top sites like Zillow, Trulia, Realtor.com and more.
Why do real estate auctions work?
One factor is auctions have a deadline. That’s right, a deadline. The deadline creates urgency. A FOR SALE sign does not have a timeline for potential buyers to submit offers. The deadline (or auction date and time) means that if a buyer has any interest in purchasing your property they must do so at the designated date, time, and place that the sellers choose. The seller is in control of these variables.
What are benefits of selling real estate at auction?
There are many. We successfully help determine the actual market value using your desired time frame and terms. The winning buyer can use all the most common financing and closing options as with a traditional sale. It’s the best of both worlds and provides a fully transparent sale process.
The costs of maintaining real estate, labor costs for maintenance, insurance, debt service, taxes and time and travel to the property and other expenses related to owning assets will cease at the completion of the auction and the closing.
Can I be assured of getting the best price for real estate at auction?
At the auction you get competing offers all at once! Each bid is simply an offer to purchase or offer to buy. The sales price is determined by competing bids that go up, not negotiated down, as with a traditional real estate sales method. A well promoted real estate auction should result in the best price. The price bidders pay at auction is solely at their discretion and on what buyers will pay in a competitive bidding format at that specific time, under the terms of the auction, and a host of other influences on the bidder. Sometimes economic conditions favor buyers, sometimes sellers.
What are the seller’s responsibilities in a real estate auction?
The seller’s responsibilities will be similar to those in any real estate transaction. Examples are:
Provide the auction company with title information
Provide the auction company with property descriptions
Provide the auction company with appraisals, surveys, etc.
Provide details about existing mortgages and liens
Provide marketing expenses
Provide information about previous attempts of marketing and the results
Make the property available for showings or previews
Seek advice during the process from your auction professional
Refer all inquiries to your auction professional
Be realistic about the value of the property
How do I know what type of market to sell in?
Our auctioneer will advise you on the best type of market to sell in. The fact is you must sell in whatever type of market conditions that exist currently. The good news is that auctions work well in most markets.
Slow markets - auctions may create the special focus your property needs and, on your schedule
Hot markets - auctions can prevent you from under selling in hot markets
Changing markets - new developments, shifts in the economy, leave uncertainty that an auction can solve
What does the auction company do?
Auctions are a well-orchestrated event. A lot happens behind the scenes until the auction day main event. Below are some of the tasks Blue Box Auction Gallery will do on your behalf:
Uses our internally developed automated tasks management system for quality assurance
Determines the objectives of the auction sale
Auction professionals inspect the assets for auction and strategize accordingly
Meets, as needed, with planning and development offices, planning boards, surveyors, attorneys, and potential buyers to prepare for a real estate auction
Tours the local community and neighborhood to help determine the marketing strategy
Works with you to identify and develop your property selling features
Works with an advertising team to create a unique marketing plan that may include local, regional, or national media, radio, brochures for direct mail, trade journals, signs, open house tours or previews, websites, social media, and email campaigns
Provides the seller with leads, inquiries, and other marketing results
Provides the seller with proof of auction marketing including all electronic medias
Prepares an auction catalog of assets for auction
Photographs and videos of the real estate for auction
Handles all inquiries to free up the seller’s time and respond accordingly
Works with the seller to determine what is the best auction day location, time, and process
Conducts the live auction with a Virginia State licensed auctioneer, online bidding or both options
Assist in follow-up and closing the transaction
Works with the closing attorney of title company