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.

Why Auctions?  Benefits to the REALTOR®

• 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.)

About Auctions

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

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

Auction Successes

Going Once, Going Twice… (Mortgage Banking, 2011). Q
The Straight Dope, (Builder, Nov. 2007). Q

Auction Risks

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

The Auction Market & Marketing

To Sell Mansions, Owners Turn to Auctions, (Bloomberg Business Week, Step. 2011).
REO Realities, (Mortgage Banking, Feb. 2011). Q
Real Estate Auctions: Marketing, Advertising, and Other Expenses, (National Association of REALTORS®, n.d.).

eBooks & Other Resources

eBooks.realtor.org

The following ebooks and digital audiobooks are available to NAR members:

The All-New Real Estate Foreclosure, Short-Selling, Underwater, Property Auction, Postive Cash Flow Book, Adobe eReader

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central.  REALTORS ® may borrow up to 3 eBooks for free!  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

Going going gone! Auctioning your home for top dollar, (New York: John Wiley-DM, 2000). HD 1341 C18g

Making real estate auctions profitable: A reference guide, (Chicago, IL: National Association of REALTORS®, 1997). HF 5438 N21m

Buying Bargains at Property Auctions, 2010, Howard Gooddie

The All-New Real Estate Foreclosure, Short-selling, Underwater, Property Auction, Positive Cash Flow Book, (Wiley, 2009).

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Effective Online Marketing

Field Guide to Marketing Tips for REALTORS®

InfoCentral Blog

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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.