A Johnston County farm, subdivided into nine tracts of approximately 10 acres each recently sold at auction. The company sent me an email with a flyer announcing the sale. I pre-registered my client, who is an investor, and we previewed the property a couple of days before auction. Before the big day, I pulled the deed to the property and researched properties in the area that had closed in the previous year. I gave the sold info to the buyer and the deed references later to the closing attorney’s office. I also went over the terms and conditions of the auction with the buyer, including the 6% buyer’s premium. The tracts were auctioned separately first and then bidders were given the opportunity to combine any of the parcels. The first high bidder got to choose which tract(s) he wanted at the price he had bid. Since he chose only one, the bidding process started again. My buyer was the high bidder on the second round and chose the lot with the most existing road frontage.  

Margaret Staley, Fern Garden Realty

Judi Margolies decided to take one of her listings to auction in mid-November.  It had been on the market over 8 months with no offers and was now sitting vacant.  While in a great area of Raleigh, the property needed upgrades and buyers were turned off by the steep driveway.  Accelerated auction marketing techniques brought in five offers with the final sale price $4,000 under the lowest MLS list price.  It closed without a hitch and Judi received a nice referral check.  Best of all, referring this challenging and stagnant property to auction allowed her to focus her attention on getting new business.

Judi Margolies (Allen Tate Realtors )

Sandra Jean LaBarbera also decided to try an auction for one of her listings too.  It had been under contract twice and had fallen through each time on buyer financing.  The seller had already moved out of state and was getting really anxious.  The listing was set to expire and there was always the chance the seller would consider trying a different agent.  The accelerated auction marketing techniques brought a total of four offers and the final sale price was $2500 less than the last MLS list price. 

Sandra Jean LaBarbera (Remax United)

We did attend the local action where two properties sold.  I want to thank you for your very informative class.   If not for your class I would have been completely lost. Because of your instruction I was able to follow along.  I even had a potential invester join me at auction and I was able to carry him along through the entire auction process. Thank you again for sharing your knowledge and experiences. 

David Fail, C & D Homebuilders, Inc, Hampstead, NC

"This past week I needed to attend an update course for continuing education, and decided to take the elective that was being offered. Not knowing anything about the auction process, I thought this auction course might be something of interest, after all it was only 4 hours, was in Wilmington, NC, only about a mile from my office and again I was clueless regarding auctions. Of course I had been to charity auctions, antique, and art auctions, but never to a real live house auction.

The class was very interesting, informative, and really did open my mind to the idea of auctioning property. All the while I was silently thinking to myself, that auctions are for foreclosures, distressed property, and for heirs to unload quickly, in other words the stigma of cheap. After learning some auction terms, each member of the class was given some criteria on how to bid and we had a mock auction.   The instructor was a licensed auctioneer and moved the bidding from a starting bid of $75,000 to a final bid of $176,000. Of course this was with play money and could not possibly be the way it would play out in a real life situation. Here is where it gets interesting....the 10% buyers premium is added to the final bid for a selling price of $193,600 ($176,000 + $17,600) that the BUYER pays.

The real auction on that same house was Saturday the 24th and class members were encouraged to attend, which was another benefit to the class. The house SOLD for $174,000 plus 10% buyers premium. WOW, WOW, this could not be possible, how could this be true? No way that it would appraise...wait, it does not have to. No way will it pass an inspection.....nope, that's not needed either. The terms of the sale pretty much assures the sale will go through.

Here is what my pre-auction research turned up....city appraised value was $151,125, needed at least $35,000 to $50,000 worth of work to bring it up to livable standards, was a 1950 style cottage with 1 bath and 3 bedrooms, in not the greatest of neighborhoods, in fact the the reserve bid was $75,000 which according to most people in attendance was its true worth and the seller probably would have sold it for that price.  
 
In the past I know I lost some buyer and seller prospects because of my inexperience regarding the AUCTION EFFECT, now I will welcome the chance. Where in this real estate world can you work with a client and have no contingencies, have the excitement of an auction, no home inspection worries and get paid in 30 days?

According to latest NAR statistics, in 10 years 1 out of 3 houses will be sold by the auction method. Don't think it won't happen.......does EBAY come to mind? Take the course, go to an auction, have fun!" 

Dick Beals, Realtor, REALTY EXECUTIVES of Wilmington