Top Reasons to Sell a Property Using the Auction Method

Why the Auction Method is Something to Consider

If you’re interested in selling a property “as is, where is,” the auction method is typically the way to go. Instead of marketing a property with a set listing price in a negotiated sale, some sellers opt for the time-sensitive format for a variety of reasons.

Auction sales can work in the seller’s favor by giving him or her more control over the process. After all, the seller gets to set the terms and conditions of an auction sale. Selling a property at a true market value is arguably most feasible using the auction method, and a property can sometimes end up selling at a higher price in an auction than in a negotiated sale. Three of the biggest auction format upsides have to do with timing, exposure, and financing.

Top 3 Reasons to Try the Auction Format Instead of a Negotiated Sale

  1. The auction method speeds up the process. Because an auction is a time-sensitive sale with a set date, this format creates a sense of urgency among potential buyers. Compared to negotiated sales, auctions stimulate a need for informed buyers to act fast, encouraging competition. It may be assuring to the seller, who knows exactly when the property will sell. In negotiated sales, the seller has no idea when the sale date will arrive – it could be any number of weeks or months after the property is listed. The accelerated timeframe in the auction method means the seller enjoys a 30-45 day unconditional all cash closing. To top it off, all due diligence, inspections, and testing is performed prior to the sale.
  2. The auction method increases exposure. Using the auction format ensures an aggressive marketing program, which is accelerated due to the limited timeline leading up to an auction. This accelerated marketing strategy can leverage the seller’s advertising investment 10-20 times in a multi-property event. Since auctions involve a large number of pre-qualified prospects, this aggressive exposure in an auction marketing campaign means the property is advertised to people who are truly serious potential buyers.
  3. The auction method cuts costs and may increase value. The speedy process involved in the auction method reduces carrying costs, which include taxes and maintenance. Auctions also require potential buyers to pre-qualify for financing, meaning the sell-side agent does not have to waste time (and money) dealing with those who are not “true” potential buyers. Compared to negotiated sales where the asking price is essentially the highest amount the seller will be able to get for the property, the sky’s the limit for properties sold through the auction method.

Over all, auctions are worth considering, especially if the seller wants an accelerated timeframe, increased exposure to qualified prospects, and certain financial upsides that the auction method can provide.

SVN Auction Services is a provider of date-specific sales and special asset solutions. It encompasses an elite group of local and regional auction Advisors throughout the United States who specialize in areas such as foreclosures, tax sales, multi-properties, receiverships and bankruptcies. SVN Auction Services offers the industry’s most comprehensive spectrum of auction solutions—from rapid asset resolution and 30-day countdown asset sales to wide area and high impact/high promotion events. As part of one of the most recognized and reputable commercial real estate firms in the industry, SVN Auction Services is supported by SVN International, which features more than 190 locations serving more than 500 markets. For more information, visit SVN Auction Services.

This blog post was adapted from the SVN | Menish Auctions website

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5 for Friday with Don Erler, CAI, AARE

It’s Friday and we are asking five questions of Don Erler, CAI, AARE of Sperry Van Ness/Ward Commercial Group in Louisville, Kentucky.

Don Erler, CAI, AARE, of Sperry Van Ness Ward Commercial Group
Don Erler, CAI, AARE, of Sperry Van Ness/Ward Commercial Group

1. What is your geographic market and product specialty? 

My partner Bill Menish and I work primarily in Kentucky, Indiana, Ohio, Illinois, Missouri and Tennessee, but have often conducted auctions throughout the country.  Erler Menish Auctions as part of SVN Ward Commercial Group conducts real estate auctions only, with primary emphasis in recent years on bank owned and troubled properties.  In the more than 25 years that I have been in practice, I have been able to establish great relationships with banks and bankers, which in today’s market have accelerated (no pun intended) my practice to  new levels of production.

2. What’s your latest best practice tip that you can share?

If you love what you do, you will never work a day in your life.  If you love people, you will love what we are doing: STP, see the property; see the people.  Get out of the office and enjoy where you live, who you can work with and how you can solve their real estate problems and goals.  When I got into the real estate auction business in 1987, my mentor told me to spend time with creative people and I would never be bored.

What’s been the biggest changeover on how you run your business in the past decade?

Wow. Years ago I hoped I could retire before I had to learn how to use a PC.  Little did I know how modern technology was going to change my life and my business.  The ability to reach out and communicate with anyone, anywhere, anytime makes this an incredible world.  It’s still a bit scary to think what it will look like in 10 or 20 more years.  It’s hard to imagine where this is all going, but the ride is incredible!

4. What business book do you like to recommend to your colleagues?

My daily focus is my health and fitness, both physical and mental.  You are only as old as you think and feel, but if your health fails, you have nothing left.  It’s not a business book, but  Younger Next Year: Live Strong, Fit, and Sexy – Until You’re 80 and Beyond by Chris Crowley & Henry S. Lodge, M.D., is a great read and offers great advice.  Also, if you need to continue to be motivated, the Canfield books and classes are fabulous.

5. What’s a fun fact that not everyone knows about you?

I have two children (33 and 20), both out of the house, so our “children” are and have always been our four-legged friends.  Right now we have two large dogs and seven cats of all flavors. I can’t image what life on our farm would be like without animals in our life.  When I met my wife in the late 1970s I had 27 animals: six dogs, four cats, six chickens, and 11 horses. She only objected to the large number of horses. But when you live on a farm in Kentucky, horses are almost a necessity to fill in the area behind the black board fences.


*All Sperry Van Ness® offices are independently owned and operated.