(Updated June 2013)
Real estate sale by auction is an innovative and unique method for completing real estate transactions. This process often accelerates the sale process, exposing a property to numerous buyers in a short period of time. Read below to learn the benefits and drawbacks to real estate sale by auction. (K.Stockert, Information & Web Content Specialist)
Auction: The Pros
- Generates a list of ready, qualified buyers
- Offers clients and customers new selling and purchasing options
- Increases revenue and market share
- Develops your own market niche
- Assurance that property will be sold at true 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
Source: Auctions: The Basics and the Benefits, (National Association of REALTORS®, n.d.)
Auction: The Cons
Feds Target Bid-Rigging Scams at Foreclosure Auctions, (June 2013).
Foreclosures Spark Crime, Report Says, (Feb. 2013).
Disarming the Bid Sniper, (Journal of Electronic Commerce Research, 2011). Q
Man Pleads Guilty to Bid Rigging at Auctions, (REALTOR® Magazine, Mar. 2011).
Price Discovery in Real Estate Auctions: The Story of Unsuccessful Attempts, (The Journal of Real Estate Research, Jan-Mar 2006). Q
What Is The Commission On Auction Properties?, (REALTOR® Magazine, June 14, 2012).
Real Estate Auctions: The Future of Home Sales? (CBS News, Apr. 2012).
The Auction Option, (Commercial Investment Real Estate, Jan/Feb 2011).
Types of Auctions, (National Association of REALTORS®, n.d.).
Auction Glossary, (National Association of REALTORS®, n.d.).
What Factors Impact the Success of a Real Estate Auction? (National Association of REALTORS®, n.d.).
More Sellers Opt for Auctions, (REALTOR® Magazine, Nov. 2011).
Selling Your Home on the Auction Block: The Changing Times, (Kiplinger’s Personal Finance, Apr. 2007). Q
Going, Going, Gone, (Builder, Feb. 2007). Q
Auction Industry Sees Growth in Real Estate, (REALTOR® Magazine, Mar. 6, 2009).
Recent Developments & Case Studies
The Role of Bidding in Determining Sales Price for Residential Property, (Journal of Housing Research, 2013). Q
Grand Estates Auction Company Takes Local Real Estate Global, (PRWeb, May 2013).
Going Once, Going Twice… (Mortgage Banking, 2011). Q
Mansion May Fetch Record Amount at Auction, (REALTOR® Magazine, Aug. 2011).
REO Auctions Should See Uptick Soon, (REALTOR® Magazine, 2011).
Troubled Apartment Buildings on Auction Block, (Wall Street Journal, Apr. 2011).
Bidder’s Choice Cap Rate Auctions: A New Strategy for Selling Real Estate Portfolios, (Journal of Real Estate Practice and Education, 2009). Q
The Straight Dope, (Builder, Nov. 2007). Q
The Auction Market & Marketing
Foreclosure Activity Drops to 6-Year Low, (REALTOR® Magazine, May 2013).
Real Estate Auctions: Marketing, Advertising, and Other Expenses, (National Association of REALTORS®, n.d.).
To Sell Mansions, Owners Turn to Auctions, (Bloomberg Business Week, Step. 2011).
REO Realities, (Mortgage Banking, Feb. 2011). Q
Auction Resources & Education
Real Estate Auction, (National Association of REALTORS®, n.d.)
Introduction to Real Estate Auction Course, (REBAC, n.d.).
Federal Real Estate Auctions, (U.S. Government Services Administration, n.d.).
On the Govsales.gov website, search for a variety of government surplus and seized property—including real estate. In the left navigation bar, mouse over Real Estate and make a selection, such as houses, buildings and land, farms, or international real estate.
Auctioneer State Licensing Boards, (Alabama State Board of Auctioneers, n.d.).
Seized Real Property Public Auctions: General Terms of Sale, (U.S. Dept. of the Treasury, n.d.).
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Books, Videos, Research Reports & More
The resources below are available for loan through Information Central. Up to three hard copy books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.
Besner auction and realty policy and procedure manual, (Acme, MI: Besner Auction, 2004). HF 5438 B46
Buying Bargains at Property Auctions, 2010, Howard Gooddie
Research on Your Own!
To search for the most recent articles on this topic, visit ProQuest and enter subject terms such as:
Real estate auctions
- Enter into ProQuest text box as subject("Auctions") AND subject("real estate")
Many websites, such as Wikipedia, can be great resources to quickly orient yourself on a subject before conducting more in depth research. However, anyone in the world can create and maintain a website or write a seemingly legitimate article and may, intentionally or unintentionally, publish false or “misinformation.” When reviewing information on the Internet, you should always consider the ABC’s:
- Accuracy. Is the information accurate? Can you confirm the same information using other resources published by a different author or organization?
- Author. Who composed the information? Can you easily identify the author and contact the author or website publisher?
- Bias. What bias might the author or author organization have?
- Credibility. What are the author’s or author organization’s credentials for publishing the information? What expertise, experience, or education does the author have in this area that makes him or her qualified to write on the subject matter?
- Currency. When was the web page last updated? Is it possible the information might have changed since this web page was last published?
- Critical eye. Remember to always use your discretion and critical eye to determine whether information you find on the web (or even in books and news sources!) is trustworthy. Putting websites to the ABC test will get you started in developing a strong critical eye.
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